A nice Quote

All Said and done

There's more said than Done!

Incentivising Corporate Social Responsibility

14.o6.2009

I was conducting a session on Business Ethics to day and while explaining Corporate Social Responsibility, made the following points:

Companies must make profits and maximize shareholders’ wealth. But, this is not to say that this is their only goal. They owe a duty to serve the community and society within which they exist, function, and derive the sustenance for their growth. If they fail to fulfill this duty, they will be no more than a cancer that destroys the very thing on which it feeds.

Corporate Social Responsibility (CSR) is a conceptual framework that analyses the various ways in which the corporate community can pay back or return to society a portion of the profits they derive from it. This usually takes the form of social welfare and other measures taken in and around the geographical area where the company operates. The benefits from such CSR measures would accrue to the public at large, and not necessarily to those who depend on the company.

If rightly applied, CSR can be an engine, driving the economic and social upliftment of society.

Arising from this, a participant wanted to know whether there was any tax incentive for companies engaged in CSR activities. While sections like S. 80G of the Income Tax Act, 1961, are, no doubt, available, they are, in my view pathetic and inadequate to truly incentivize CSR from a fiscal perspective. For example S 80G restricts the deduction on contributions to Charitable Trusts to 50% of 10% of Gross Total Income. Thus if a company, having a Gross Total income of Rupees Twenty-five lakhs, has contributed Rs. 5 Lakhs to an NGO engaged in social upliftment in a remote tribal village, the company would get a tax write off of about Rs.1.25 lakhs! Let us remember that this figure is the total amount that this company would get as a tax incentive for that year irrespective of the total donations made.

Moreover, there is no tax incentive for amounts sent by companies directly on Rural Development as such amounts may be considered as not spent wholly and exclusively for the purpose of business!

There is, therefore, a serious need for providing tax incentives on amounts spent by companies directly on alleviating the sufferings of the people in their local community as fulfillment of their social responsibility.

For example, a company may build a school for children of a village in the vicinity of the factory. At least eighty per cent of this amount should be allowed as a tax deduction. The utilization and benefit arising from this activity shall be documented and certified by a designated NGO as well as five independently selected beneficiaries who are not part of the local government.

Thus companies would spend directly on social welfare amounts that are being unnecessarily paid to the Government as tax which is misued or improperly or inneficiently used by a combination of corrupt and lethargic bureaucratsand politicians.

Lament

I weep for my loss

I weep for yours

I weep for those things

We may never see again

I weep for the Royal Bengal Tiger

Striped, striding, strong and sure;

I weep for the life giving Paalaar river

Wide, winding and wondrous pure

I weep for the Banyan,

Pulled down to make way

For the convenient, useful

Four- lane Highway

I weep for lives that might have been

I weep for dreams undreamt

I weep for a childhood spent in joy

Running free with hair unkempt

Temple for each Brother

During my recent visit to Sabhari Mala for the Prathista Day, I had the opportunity to visit the Four Temples dedicated to Sri Ramachandramurthy and his three brothers Lakshmana Swamy, Bharatha Devan, and Shatrugna Devan. While Rama was the Avatar of Shrman Narayanan himself, the three brothers are embodiments of the divine objects associated with Vishnu. In this sense, Lakshmanan is Adhi Seshan, the 1000 headed serpent which forms the bed on which Shri Vishnu is in Anantha Sayanam. Bharathe and Shatrugna are the embodiments of the Conch and Disc. Thus worship of these four brothers is a hoilstic worship of Vishnu. 

Nalambala Pradhakshinam 

The idols of Sree Rama, Bharatha, Lakshmana and Satrughna which were adored by Sri Krishna during the Dwapara period are installed and consecrated at Thriparayar, Irinjalakuda, Moozhikulam and Payyammel respectively. A pilgrimmage to these four temples on a single day during the holy month of Karkadaka will shower the blessings of health, well-being and all round prosperity. 

At the top of this Blog you will find the Gopura Vasal of all these temples. Gopura Dharsanam Kodi Punyam!

River in the Backyard!

I was in Kerala on on 16th May conducting a "Communication Skills" Program for the executives of MIL Controls (India) Limited. MIL Controls is a leading supplier of Control Valves to various industries, particularly the energy sector. The valves manufactured by them are high precision contrlo instruments that are pivotal in any boiler installation or any other application where there is a need to control the flow of any substance in terms of pressure, volume or heat. Originally a joint venture between Best & CRompton and Masonelian (India) Limited, in 1997 it became a part of the KSB, a German  groupwith international brand in pumps and valves.

The factory is built on a sprawling 23c acre piece of land right in the middle of "God's Own Country", Kerala at Meladoor  (Male-uh-Door(OO as in Room) about 4 kms from Mala. Though Meladoor is in Thrissur district, it is nearer to Aluva which is just 14 kms away.

I stayed at their guest house at Aluva in a place called Periar Gardens, adjacent to the banks of the river Periyar. In fact from the garden at the rear of the Guest house I had a pleasant view of the wide periyar river.

Look Back! You are the Ocean!

A new wave was born in the ocean. It rolled about and splashed here and there, generally communicating its happiness to the other waves. The waves rolled on and approached the distant shore. Suddenly, our Wave sees a rock looming large in the horizon.

It looks on petrified and starts screaming. Another wave nearby asks what the problem is. Our wave says, 'Hey! See that Rock? We're going to crash and die!!!' 

The other wave says, 'So what? Look back you are the Ocean!"