Inside India: Experts discuss CSR

In a discussion with CNBC-TV18's Shereen Bhan, Arun Maira, member, Planning Commission, Veerappa Moily, Corporate Affairs Minister, Dilip Chenoy, MD and CEO, NSDC and Neelam Chibber, co-founder, Mother Earth, speak about corporate social responsibility.

Below is the edited transcript of the interview on CNBC-TV18. Also watch the accompanying videos.

Q: As far as the government is concerned, one of the problems is the approach to addressing these problems. If you don’t identity the right problem, you will never come up with the right solution. The approach of the government seems to be to throw money at everything. Would you agree that the approach is the problem to start with?

Maira. I am so pleased that I am with the Moily because he and I had been talking about changing the approach of corporations. But you are asking me to change the approach of the government. It’s actually an approach of collaboration between the people, the corporations and government. Here we are making the 12th Plan and we know that in this 12th Plan, the condition of our children, their education, their health must be our primary concern. We are doing very badly as a country with respect to those matters. So, people say, ‘well, we need to throw more money towards education and health and unless you put 2% of your GDP towards health, you will not be able to improve the health and a larger number towards education.’ So, it’s about money it seems as you said.

But right now with the GDP not going as well as we thought it might, there is not that much money to give to these sectors. So, what’s the way out? One is to postpone it till we get the money, but the children are growing. Their blood is forming, their brains are forming. They need the education and the health now. So, what do we do? We got to find innovations. Innovation means with less money I will provide a better quality education and health than the conventional models. It would have to necessarily require collaboration because innovations invariably mean that you got to work outside your competency and your box. So, it’s only when you are challenged and combined with other diverse competencies, that innovations are more possible. So that’s the approach. We need more collaborations and certainly innovations a different approach.

Q: Perhaps the reaction from industry would have been different, had the government not made it about money. Had the government not said that you have to put 2% of your profits away mandatorily towards corporate social responsibility, some of them don’t have the bandwidth to put up hospitals and schools etc. Some of them don’t know how to do that. The whole point of making this effective was not how much they would put a way by way of mandatory profits given to the government, but how was this money actually going to be used, how was this money going to be allocated, what was this money going to do. That discussion never really took place.

Moily: That is the actual model which we intend to go in. That’s why the schedule has been put up. That schedule has a lot of flexibility. As and when the model is livid, we can replace with the other one.

Q: For instance, if the government were to say we are identifying 10 mega projects. This is where this money that you put away is going to be used for, perhaps the reaction would not have been as adverse.

Moily: No. It is not as if government is taking over these funds. It is left with the companies to administer. Ultimately, if they cannot perform according to formula which you have said, they will have to explain it why they could not perform. It’s a voluntary effort.

Q: What has your experience been at this point in time at the National Skills Development Corporation (NSDC) because you are trying to get that collaboration going?

Chenoy: I think if you take the NSDC experience of getting the corporate sector involved in delivering scalable, sustainable, skilled development models. I want to make a distinction. It’s not skill developed through aid or corporate social reasonability.

That means this is not grant based or free based, these are sustainable model. I think the response so far has been great. We have got 49 corporates wanting to get into this business. What is fascinating is that if you look at each one of those 49 skill development initiatives that the board has approved, there is not a similar one. Each model is different, each model is unique.

Q: How do you actually talk about social entrepreneurship in today’s context? How do you get social entrepreneurs to scale up?

Chibber: Social enterprises need to scale. I totally believe they need to scale. They need to scale in the collaborative approach. Like we have an investment from Future Group, so that’s it. If I believe that all the 10-20 large business houses in the country, each incubated three to four, five-six social enterprises, you would solve huge amount of problems because we are in the livelihood space, so we needed retail market knowledge. We had to scale retail business. So, we approached Future Group.

Q: Also, let’s be very clear about how we define a social enterprise. This is a sustainable often for profit organisation.

Chibber: Yes. It is for profit and a lot of social investors beat me on the head with it, but I do believe social enterprises plough back all their profits and dividends back into growing the business. That is the aim of a social enterprise that it scales because there is so much to be done. So, maximum amount of your profits should go into scaling your impact.