A case against punishing non-compliance of CSR guidelines

GS-IV: A case against punishing non-compliance with CSR guidelines

Context

To mandate that private firms donate a part of their revenues to charitable causes is to profoundly misunderstand both the social responsibility of corporations and the meaning of the word donation.

Arguments against punishing non-compliance

The fundamental social responsibility of corporates is to generate wealth for shareholders in a law-abiding, ethical and sustainable way.
They generate surpluses for society, provide consumers with goods and services that they need, create employment, purpose and dignity among workers, and strengthen the nation.
A profitable, well-run corporation does more for India and its people than any charity could possibly do.
Government, through taxation, has the duty of providing public goods like education, public health, safety, and environmental protection. The government should not indulge in wasteful expenditures through loss-making airlines, wrong subsidies, etc.,

Philanthropy is a private matter—it is up to the individual to decide whether, how much and who to give to. The government can encourage this—through tax deductions, public acclamation, and moral suasion, but should not intervene.

Why CSR

Allocate funds into activities that a government of a low-income democracy cannot.

Faced with immense developmental challenges, our governments cannot easily justify allocations for world-class art galleries, museums, theatres, sports facilities, research institutions and so on.

Individual philanthropy and CSR can support causes that democratic politics won’t allow the government to.

Problems with current CSR spending

The bulk of CSR spending is going into education, health, rural areas, the environment and so on. Already the government is spending hundreds of lakhs of crores for the same purposes.
Corporate executives are unable to decide on the best social use of CSR funds because they are not equipped to do so.

Way ahead

The right role and the right balance between corporate profits, government taxes, and individual charity promote social welfare.
Do away with mandatory CSR, lower corporate taxes, and introduce tax deductions for certain activities that the government wishes to promote.

Source: Indian Express

Join Our Telegram

Borrow abroad and profit

Why we need to look beyond the ‘electric’ smokescreen

Formation Day

03 Dec, 25
SHARE

On 1st November, eight Indian states—Andhra Pradesh, Chhattisgarh, Haryana, Karnataka, Kerala, Madhya Pradesh, Punjab, and Tamil Nadu—along with five Union Territories—Andaman and Nicobar Islands, Chandigarh, Delhi, Lakshadweep, and Puducherry—celebrate their Formation Day. This date marks an important milestone in India

Turtle (Kachhua) Wildlife Sanctuary

02 Dec, 25
SHARE

The Turtle Wildlife Sanctuary, also known as the Kachhua Sanctuary, is located in the Varanasi district of Uttar Pradesh. It is recognised as India’s first freshwater turtle wildlife sanctuary, established to conserve endangered turtle species and support the ecological health of the Ganga River. Location and Extent The sanctuary co

Introduction of AI and Computational Thinking (CT) in

02 Dec, 25
SHARE

The Ministry of Education plans to introduce Artificial Intelligence (AI) and Computational Thinking (CT) from Class 3 onwards in the 2026–27 academic year. This initiative is part of the National Curriculum Framework for School Education (NCF-SE) 2023 and aligns with the National Education Policy (NEP) 2020. The aim is to prepare student

Sal Tree

02 Dec, 25
SHARE

Scientists from the Environment Department of Himachal Pradesh University (HPU) in Shimla have recently revealed that the Sal tree (Shorea robusta) is the most effective natural air purifier for combating rising pollution levels. Their findings highlight the tree’s superior capacity to trap dust, absorb gases, and cleanse the air compared

US Resumes Nuclear Weapon Testing

02 Dec, 25
SHARE

The President of the United States has ordered the resumption of nuclear weapon testing after a gap of 33 years, the last test being in 1992. This decision marks a significant shift in global nuclear policy and has far-reaching implications for geopolitics, the environment, and international security. Status of Global Nuclear Weapon Testing