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CSR, tech revolution and bank crisis

There was a time when Chennai presented top ranking intellectuals to deliver lectures on current and emerging subjects. Brilliant public speakers like S Narayanaswami (Chitra & Co) and Dr P S Lokanathan used to enthral large audiences on current economic issues.

CSR, tech revolution and bank crisis

With interest in Tamil Nadu shifting to politics and cinema and with the business leaders’ concern over the bottom line, one witnessed a decline in such discussions. I was therefore, impressed with three lectures, each topical and brilliant, delivered on consecutive days.

N Vaghul who took ICICI to great heights presented a delectable review of the crisis in the banking sector. The next day I heard Cognizant Lakshmi Narayanan make a brilliant address on corporate social responsibility. On the third day,  S Ramadorai (of Tatas and the National Skill Development Corporation) spoke on the fourth industrial revolution. Each dealt extensively on the tasks ahead.  Excerpts:  

 

Are CSR activities on the right track?

 

The President of the Madras Chamber of Commerce and Industry S G Prabhakharan mentioned that the mandatory two per cent of profits stipulated as contribution for corporate social responsibility helped raise Rs 20,000 crore; but only around Rs. 6000 crore could be spent.

Cognizant’s Lakshmi Narayanan explained this amount in perspective: non-government organisations receive and spend annually Rs 60,000 crore, while the CSR spend amounted to just a tenth of this. Lakshmi provided a measure of the government spend on welfare: Rs 80,000 crore budgeted by the rural development department.  If  the welfare schemes of all the ministries such as education, health, and social welfare are aggregated it amounts to around Rs. 800,000 crore. He quoted Bhaskar Chatterjee’s report on the impact: that the corporates create greater impact of such spending on welfare than the government. If the government and the corporates work together the impact will be phenomenal.  

Lakshmi referred to the interest of the government to direct the CSR allocations to areas designed to reduce its own burden! He cited three instances:

One, the HRD ministry seems to believe that the large expenditure incurred on higher education has to be shared by corporates because they benefit from the copious availability of educated manpower. IIT education involves large subsidisation by the government. If the government has to reduce this, it can either increase fees four’fold or arrange loans that could be repaid by the students. The government seems to nudge gently IITs to tap the CSR resources.

Two, the National Skill Development Corporation envisages skilling 100 million over 12 years. Six years of these have already gone. Since the skilled manpower would directly benefit industry, why not make the corporates bear the cost?

Three, can a separate  fund be created to which corporates can contribute to provide succour for natural calamities.

Lakshmi pointed to the eroding freedom to spend by corporates on CSR issues. He did concede that this erosion is directed at worthy causes. “Can this mean the large spend by corporates and by NGOs on public schools would end? Can this mean large corporates like Infosys would be forced to vacate donating midday meal programme for school children through the Akshaya Patra?” he asked.

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