Corporate social responsibility (CSR), one of the great claptraps of contemporary Indian corporate life, and a concept that defies all laws of economics and business, will soon be codified and institutionalized. ...
Effectively if a suitably-sized company makes any real profits, it better set aside 2% of that to do what the government should be doing anyway using the tax payers money. And if it doesn’t, it better give a good reason why it didn’t. ...
Is the provision aimed at forcing companies into more socially responsible behavior? Or is it meant to force funds into developmental activities? If the first, then it is a laughable initiative. Why would a company behave any more responsibly just because it has to account for 2% of its profits on socially-oriented activities? ... The elaborate charade of “doing good”, is often no more than routine corporate activities, a phenomenon dubbed “greenwashing”.
If the government’s objective is to force companies to contribute to national development, ... there is no conceivable reason why a company that makes electric bulbs should do a good job of running a primary school. As Harvard economist Theodore Levitt put it succinctly, ‘government’s job is not business, and business’s job is not government’.
It's a highly cogent argument. Please go read the whole thing.
