Business and Welfare in India: A Historical Perspective

​The recent Companies Bill with its guidelines for corporate social responsibility (CSR) has invoked a range of reactions. While some of them have been positive and welcoming, some others consider this as an added imposition on an already overburdened company. It is argued that considering the current global economic environment and its characteristic lack of growth it is as such difficult for a business to be viable and succeed. In this scenario CSR should not be imposed on companies. These reactions beg the question – is social welfare concerns of business and industry new to the Indian context? This paper will seek to address this question.

Tradition of CSR in India
India has historically been a predominantly Hindu society. Hinduism, even more than the other religions, lays out principles and tenets that not only govern the religious activities of a person but also every aspect of his/her everyday life. Hinduism encourages enterprise and trade that fulfils the requirements of all the members of society. There are primarily two aspects that emerge from a study of the influence of Hinduism on business. Firstly, greed, aggrandisement and exploitation of the needy are abhorred by the Hindu religious tradition. Thus, a person in any walk of life must shun these qualities and behaviours. The same is then true for a businessman or an industrialist. Secondly, the Hindu society was traditionally divided into fairly rigid varnas (four-fold categories) and further into jatis (castes) which formed a hierarchy. Each of these castes had a traditional occupation. Some of the castes under the varna Vaishya had the occupation of traders and owners of business. As part of the detailed dharma (that which is religiously ordained) of each caste as laid out in the scriptures, the castes which had such a traditional occupation were expected to earn profits and even amass wealth. Yet, even in the case of these castes the scriptures brought out the pitfalls of extreme greed and the lack of generosity.
Religions, that later developed in the Indian sub-continent or elsewhere in the world but had followers in India, like Islam and Sikhism also laid out tenets that encouraged qualities of generosity and kindness amongst its followers. They condemned excessive greed and lack of sympathy for the sufferings of one’s fellow beings. It is also noteworthy that all the major religions emphasised that human beings should not get extremely attached to material things in the world and should also place virtue and selfless service above material desires. There should be willingness to share one’s good fortunes with those who are less fortunate.
Given the socio-cultural and religious value systems existing in India that are described above, there has always been scope for businessmen and traders to undertake welfare and charitable activities. In the case of Hinduism this did acquire some patriarchal overtones. Whether it was the landowner zamindar or the owner of an industry the person was more of a patriarch undertaking charitable activities for those inferior in status. It is interesting to note that while it was believed that the most virtuous giver was the one who gave no thought to what he/she would get in return, the Hindu theory of the cycle of rebirth and karma (human actions) does propagate the idea that whoever does a lot of charity earns punya (rewards for virtuous acts) which benefits him immensely not only in his present life but also in his next life. This consideration could have motivated a lot of charity. On the other hand, the other religions placed the giver and the taker as equals and the act of giving as a humbling gesture. Therefore, it can be stated unequivocally that charity and generosity by the wealthy towards the needy is preached by all religions practiced in India.
While these religious norms do to an extent guide social life even in present times, a number of other social, cultural and economic changes have led to an erosion of these norms. Capitalism, liberalisation of the economy and a number of social changes attendant on these economic processes have led to unprecedented desire for profit and a luxurious even decadent life. This is in evidence in the conduct of many large industrialists and businessmen in the country and has often been brought to notice by the Prime Minister and other senior political leaders. The greed for wealth without thought for the sufferings of the poor is gradually becoming the norm. It is this trend which makes a Companies Act that clearly spells out CSR guidelines and makes them binding indispensable.
Yet, it can be argued that the model of charity and social welfare all the religions gave birth to is fairly different from the model that the modern corporate social responsibility approach envisages. Let us see how?
Different Models of Development
The earlier approach to charity by business and industry was one of benevolence. Even where the owner-worker relationship did not have elements of patriarchy, the purpose of giving was to correct a wrong and to fulfill gaps in material needs of the poor. It created and reinforced a sense of dependency. The present approach in social responsibility and development lays emphasis on empowerment. It aims on building skills and capacities among the people to enable them to ensure their own well-being. The two different approaches are almost parallel to the two main approaches to development across the world. The first is the welfare approach which while benefiting the needy sets them up permanently as dependent on those who take care of their needs. The second is the empowerment approach that aims to do away with the poor and needy being dependent forever. It aims to empower them with skills, education, knowledge and resources to eventually take care of their own needs. Further, development initiatives across the globe suggest that any positive impact is possible only when they focus on building individual abilities to fulfill their own needs rather than permanently depend on another person or institution.
In order to inspire companies to show keenness on corporate social responsibility, often traditional practices are invoked. It is argued that India has had a tradition of charity and social welfare. While this is true, in order to take a significant step towards corporate social responsibility we may have to unlearn some of these traditions. The aim is to create and strengthen processes of development based on empowerment, sustainability of the environment and the ecological balance towards overall well being and superior quality of life of all individuals.
While there is the difference in the framing of the end outcome, there is also a difference in the manner in which the process starts. Whereas earlier the businessman or industrialist would contribute to the process out of a sense of sympathy, now their role is framed in terms of ‘responsibility’ therefore ending the voluntary element in it and making it more binding. This is a very significant and positive development in the history of corporate philanthropy and it is important to sustain and strengthen it.