Former Secretary, Heavy Industries & Public Enterprises, Government of India, who initiated CSR Guidelines for the Central Public Sector Enterprises ( CPSEs) in 2007.
CSR VISION: What was your thought behind the CSR GUIDELINE for CPSEs, which you initiated during your role as Secretary, Heavy Industries & Department of Public Enterprise?
Dr R.C.Panda: As you know, I took over as secretary in the year 2006.My very close and detailed examination of the existing policies disclosed gaps in two specific areas for the Central Public Sector Enterprises (CPSE). First gap related to the non existence of Corporate Governance Guidelines for the CPSEs and the second gap was implementation of Corporate Social Responsibility (CSR) in the ad hoc manner due to the absence of any guidelines from the Department of Public Enterprises (DPE). I identified the need to have guidelines in these two subjects which should be generic in nature applicable to all CPSEs. The performance assessment and management was in place through the MOU system. But no guideline for corporate governance was given to public sector to follow. Though there were provisions in the company law for corporate governance for the listed public sector companies, but the central public sector enterprises were about 250 at that point of time out of which only about 40 CPSEs were listed in the stock exchange. Therefore, only those listed public sector companies were to follow and comply with the listing mandates of the stock exchange. Others more than 200 companies were not given any guidelines on corporate governance principles to follow. Therefore, I could arrange government policy decision and issued the guideline on corporate governance to be complied with by all public sector companies. The first gap was bridged for all CPSEs.The second policy gap identified by me was the corporate social responsibilities. There was no such guideline to the CPSEs and the need was imminent. The draft guidelines on CSR were put to the first round table during my tenure and after my superannuation with improvement, the CSR guidelines were issued. It is heartening to note that the company law amendment made in 2013 had brought in special provisions on CSR mandating the public and private sector companies to follow.
CSR VISION: What are the UNIQUE CSR practices those can be attempted by the CPSEs?
Dr R.C.Panda: CSR is a tool through which the companies can achieve two sets of their goals viz (i) corporate goals and (ii) aspirations of the citizens living within the operational hinterlands for social and community needs and assets.. Hardly the CSR projects acieve both goals but generally one of the goale are stated to be the objectives. This particular approach is not always taken by CPSEs. The whims and fancies of the political executives controlling the CPSEs used to be adopted and funded by the CSR funds. But with the new mandated provision on CSR in position under the company law as well as DPE guidelines issued by the Department of Public Enterprises, certain clarity has emerged. The unique practice can include funding of the national priority programs, where as Private companies are not necessarily to channelize the CSR funds for the national priority programs of the government. More often than not the majority shareholders of the private companies set the tone for spending of the CSR funds.
CSR VISION: How do you assess the CSR trends in India, both in public and private sectors?
Dr R.C.Panda: The trend of the CSR is yet to develop in a systemic way. The CSR fund at present is implemented in ad hoc manner. For example last year the Swachh Barat Abhiyan was given priority by honourable Prime Minister and today you can see that every public sector company has jumped into the Swachh Bharat Abhiyan and had been providing toilets in the schools. Where as in the same village there may be Aanganwadi, there may be Child Welfare Centre, there may be ICDS outlet, there may be even Primary Sub Health Centre, where the toilets may not be existing. Therefore this has become a top down, target oriented spending for national programmes. The SBA promotes swachh Bharat. In stead of taking holistic and all expansive coverage of adopting the entire village for defecation free, the attempt of only school toilet though makes a beginning but does not meet the main goal. In both private and public sector companies, there does not exist any detailed CSR plan, nor CSR audit or assessment of the past work.. In the absence of the proper assessment, the funds are spent in such an ad hoc and sporadic manner that the objective for which it is spent doesn’t percolate down to the real beneficiaries. To cite an example, few years back in the aluminium mines of NALCO, the extremist groups attacked the villages which were over the years receiving CSR funding for their development. Had there been a proper CSR planning for the hinterland villages and its development, may be such attacks could have been avoided..
CSR VISION: What will be your advice to the CPSEs for adopting CSR in their respective companies?
Dr R.C.Panda: I would give two prompt strategic advices to the CPSEs. First would be to take stock of all the CSR activities already done in the past to till date and conduct a social assessment and quality audit of the CSR funded projects. The second strategic advice would be futuristic, to draw conclusions from the first strategy and use the lessons learnt to prepare fresh short, medium and long term strategic CSR plan. The strategic CSR plan should not only go by the basket of approved activities under schedule 7, but also explore in the plan new and innovative projects which would compliment and supplement the activities to create synergy in the company. I would give an example here. The skill development of the worker and executives is the function of HRD or HRM but to promote skill amongst the young unemployed youth in its hinterland for getting future employment in the company can be a CSR function.
CSR VISION: What would be your suggestion for expediting the CSR adopting process in India?
Dr R.C.Panda: The company law itself has created a mandatory provision for the companies. Therefore review, monitoring and assessment by a third party monitor and rating the companies for allotting ranks in the CSR implementation by the CRISIL would be needed. The evaluators should take into account the outcome of such CSR activities. The CSR plan should be put in the website of every company. The companies can also solicit ideas on CSR from its clients.
CSR VISION: Any information, you would like to share with our readers!
Dr R.C.Panda: The vigilant citizenry is the strength of a democratic set up. CSR is an activity mandated by the law to the companies and citizens have every right to question if wrong doing is taking place by any company in implementing CSR. Let me tell the readers that many CPSEs and private companies have establishes trusts through which are implementing excellent need base projects. As good work is being done, the CSR awards for private and public sectors companies should be instituted by Government of India to bring in innovation and competiveness amongst the companies. Though the CSR is in a nascent stage in the country, as the years go by, the experiences gained in CSR will become very important tool in the hand of the companies to achieve their corporate vision, while complying with their social responsibilities and meeting the aspirations of the clients..
Dr. Ramesh Chandra Panda born on February 17, 1948 holds Doctorate in Economics and belonged to Indian Administrative Service (1972 batch of Tamil Nadu Cadre). He retired as Secretary to Government of India, Ministry of Heavy Industries and Public Enterprises.
He held also the following posts at the Government of India :
- Secretary and Additional Secretary, M/o Statistics and Programme Implementation;
- Joint Secretary and Mission Director D/o Drinking Water Supply.
- At the Government of Tamil Nadu, some of the posts held by him are as under:
- Secretary, Rural Development Department
- Secretary, Agriculture Department