April Issue - 2012

Smile Foundation


THE INDIAN PUBLIC SECTOR– Catalysing Growth - Economic and Social

The concept of corporate social responsibility is anything but new in context of the Indian economy. Though it was earlier based on the idea that not only companies along with public policies should take responsibility for social issues; in more recent approaches, CSR is seen as a concept in which companies voluntarily integrate social and environmental concerns into their business operations and into the interaction with their stakeholders. And one of the primary reasons for this is ‘survival in a head-to-head competition’. The outcome of this changed approach is well reflected in the approximate spend of Rs. 8,700 crores* by Indian companies – both private and public – on CSR programmes during

Given India’s long tradition in this field, its CSR agenda has undergone four prominent transitional phases. The first phase was predominantly determined by culture, religion, family tradition and industrialization. The second phase was dominated by the country’s struggle for independence and was influenced fundamentally by Gandhi’s theory of trusteeship. The paradigm of the “mixed economy” with the emergence of PSUs and ample legislation on labour and environmental standards affected the third phase of Indian CSR. In the fourth phase companies and stakeholders began abandoning traditional philanthropic engagement, and started integrating CSR into a coherent and sustainable business strategy, adopting the multi-stakeholder approach.

Against this background, the Indian public sector has played a very crucial role. The initiatives of public corporations have been critical in the development of several backward regions of the country. As per the Industrial Policy Resolution of 1956, the public sector was created to help in the rapid economic growth and industrialization of the country. It aimed to create the necessary infrastructure for economic development, generate resources for development, promote redistribution of income and wealth and create employment opportunities. Initially, the sector struggled to achieve a balance between employment generation and profitability. But the economic liberalization of 1991 unleashed the hidden potential of PSUs, creating global corporations. The public sector has ever since been instrumental in developing India’s economic power, keeping it safe from the global economic crisis.

Similarly, at this point when sustainability and corporate responsibility induced by various changes and threats has risen, the Indian government in response to this global trend of adopting policies responsible towards the society and environment, has rested the primary responsibility of CSR on the Indian public sector. As a part of this process, CSR has become mandatory for the public sector and is evaluated with a percentage weightage. And the PSUs are doing a great job inZZ taking the multi faceted challenges head on. Starting from the strategic integration of social and environmental issues with the business strategy, to skill building required to plan, implement and monitor CSR programmes, to finally transform to a triple bottom line culture – the public sector is managing all of it commendably.

Guidelines in terms of conceptualization, planning, implementation, research, documentation, advocacy, promotion, development, funding, baseline survey and its documentation and monitoring of the impact, have been laid down meticulously, to match the significance of this agenda of CSR. Since the guidelines state that the implementation must be done through specialized agencies instead of the enterprise itself, one of the biggest challenges faced here by the sector is the trustworthiness and effectiveness of the implementing agencies.

The need of the hour and choice, therefore, for the entire sector gets limited to organizations/agencies which adhere to transparent, credible and accountable management processes.

Smile Foundation, for example, is one of the very few development organizations in India which adheres to the principles of Good Governance in order to ensure and promote application of best management practices, compliance of law and adherence to best possible ethical standards. Starting from the policy and decision making, to following credibility norms; from project management and monitoring processes to the audit system; everything in Smile Foundation undergoes a four tier mechanism to ensure the impact of investment and accountability in utilization of funds. And this has been one of the major reasons why Smile has risen to be one of the most preferred partners for many leading PSUs for implementation of various development initiatives.

SAIL, GAIL, IndianOil, Hindustan Petroleum, and NSIC are some of the many public sector bodies which have partnered with Smile for different development programmes. SAIL for example has partnered for a mobile hospital for the underprivileged in Delhi NCR and employability training programme for the marginalized youth in Kolkata. GAIL again is supporting a mobile hospital in Delhi NCR and an integrated community development project in Madhya Pradesh. IndianOil and Hindustan Petroleum have partnered with Smile for its livelihood initiative. NSIC has partnered with Smile to implement an integrated community development project in the slums of Delhi NCR. This integrated project includes education of children, healthcare of the community dwellers and empowerment of women and adolescent girls.

Speaking about NSIC’s partnership with Smile Foundation Dr. H.P. Kumar – Chairman cum Managing Director, NSIC states “Working for the development of the less privileged has always been an important aspect of the way we function and work. Hence when Smile Foundation approached us with the concept of having an integrated development project, we immediately committed our support. With this project we are not focusing on just one aspect of development but are trying to address the major needs for sustainable development of the less privileged in the country. The focus on an all round and holistic development of the people is what is required to bring about sustainable development and this is the most special thing about this project. We are happy to have partnered with Smile Foundation and hope that with this partnership, we will be able to achieve our vision of bringing about growth and development of the less privileged.”

Given the dire need of social and environmental development in the country and the prevailing ad hoc charity mode, as expected, it is the public sector that has risen to the occasion. Aligning itself brilliantly with the very objective of being set up, the sector is indeed achieving inclusive growth ensuring equity to the overall community. Having realized the opportunities.

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