The proud Indian nation over there in the sub continent of Asia is the first nation to introduce laws governing the corporate social responsibilities of firms operating there. In particular, their laws bought in a change that as of then required firms, business, corporations and the like to contribute two percent of their profit to charities and so forth and so on.
The question that comes to mind here though is, is this really the answer to a innovation problem that sees the country one of the poorest throughout the entire globe? It does tend to make sense when you consider it from a purely diplomatic and policy point of view. However, on the other hand, small business and even medium sized operations carrying out their work on Indian soil have to date already have staked some sort of influence on society and local people right there into the ethics and flavor of their company when they form and build it. There’s no changing that through laws foisted upon them. Really, it has to come from the core of the company for it to be effectively implemented by that actual firm itself.
This newly introduced statute in India is a whopping document. In fact it totals 294 pages to be exact. It actually needs the company in question to establish a board that it in charge of corporate social responsibility. It also needs to give over two percent of its profit generated even over the last 3 years to corporate social responsibility implementation. It then is required to be submitted for review at the conclusion of the financial year. This is to be carried out by the board leader in order to maintain its compliance with those laws. After all of that occurs enforcement of the legal requirement becomes a little unclear to say the least bit.
So what does this mean for real companies currently operating in the land and nation of the Indian people? Well it applies to businesses that are currently bringing in about five billion dollars rupee each year. In US dollars that totals around about eighty million. It also applies to companies making 10 billion rupee (or 160 million US dollars), and those making over 50 million rupee which amounts to 830 000 us bucks. Apparently, this amounts to around about eight thousand Indian firms. This would essentially bring in about 1200 to 15000 crore rupee which is the same as around about two billion us dollars.
So who is effected by these laws in particular?
There are various large corporates in India that are to be impacted by this. Some of them include Wipro, Tata, Airtel, and Reliance. So far these organisations have actually set up foundations and participate in work that assists their communities to become stronger. In particular, they have been doing what they can to help stop the poverty situation that takes place in their country around them. However, these programmes are not without their critics of course. They argue that such funds are not necessarily the most effective method by which India’s social and poverty problems may be tackled.
What did Bill Gates have to say about this?
All the way back in the year 2008, William Gates of Microsoft gave a speach at the WEF forum. The main gist of his talk was about the idea of ‘creative capitalism’. HE communicated this idea of business taking inventory of their main skills and assets. These may include agricultural skills, technological apptitude, health knowledge and what not. He said these actual special areas of knowledge that these companies are very good at could be used to contribute to alleviating social problems rather than simply chucking money at the problems through charities as this is often as good and effective as throwing pasta against a wall just to see if it will stick or not.