India is a resource rich country. As per Wikipedia: “the total cultivable area in India is 1,269,219 km² (56.78% of total land area). India has a total water surface area of 360,400 km² and receives an average annual rainfall of 1,100 mm. Irrigation accounts for 92% of the water utilisation, and comprised 380 km² in 1974, and is expected to rise to 1,050 km² by 2025, with the balance accounted for by industrial and domestic consumers. India’s inland water resources comprising rivers, canals, ponds and lakes and marine resources comprising the east and west coasts of the Indian ocean and other gulfs and bays provide employment to nearly 6 million people in the fisheries sector. In 2008, India had the world’s third largest fishing industry.
India produces 4 Fuel minerals, 11 metallic, 52 Non-metallic and 22 minor minerals, totally 89 minerals.(2) India’s major mineral resources include Coal (4th largest reserves in the world), Iron ore, Manganese ore (7th largest reserve in the world as in 2013, Mica, Bauxite (5th largest reserve in the world as in 2013), Chromite, Natural gas, Diamonds, Limestone and Thorium (world’s largest along Tamil Nadu’s shores). India’s oil reserves, found in Bombay High off the coast of Maharashtra, Gujarat, Rajasthan and in eastern Assam meet 25% of the country’s demand. ”(2)
It would be abundantly clear from the foregoing how resource rich our country is.
Over the last two decades, India has implemented wide-ranging reforms that opened up the economy, dismantled the old licensing system and introduced competition into a number of sectors that had previously been dominated by Public Sector Monopolies.
Over the last two decades, India has implemented wide-ranging reforms that opened up the economy, dismantled the old licensing system and introduced competition into a number of sectors that had previously been dominated by Public Sector Monopolies. Supported by further reforms, convergence accelerated in the 2000s and growth averaged over 8 % a year which is one of the strongest performances in the World (1). Although India is resource rich, and in the post reform period the economy has shown excellent growth, paradoxically, amidst such progress, there are many disturbing facts.
With rapid industrialisation, there has been significant deterioration of the environment. Central Pollution Control Board (CPCB) undertook critical assessment of 88 industrial clusters of the country and declared 47 clusters as critically polluted. The ambient air quality in many of the Indian cities is extremely worrisome.
As per UN estimate of 2010, about 30% Indians live below India’s poverty line; as per UNICEF, one in three malnourished children worldwide is found in India; about 25% population of the country is still illiterate; about 97 million people do not have access to safe drinking water; about 800 million do not have access to sanitation services; infant mortality rate is 5%; diarrhea alone causes about 1600 deaths per day to name just a few. (3) One look at these facts makes one wonder what exactly is progress?
India has huge talent pool comprising of technocrats, scientists, engineers, doctors, economists, intellectuals, and also an enviable natural resource base. There is no real dearth of technology or knowledge and there are many Government programs to alleviate the issues mentioned above. There are a large number of corporates and philanthropic foundations which are more than willing to fund any such developmental program. In spite of such a conducive environment, ironically, we are unable to solve some very fundamental issues. Some of the reasons might be the rampant corruption, shifting political focus, poor implementation and execution, scattered efforts unable to make an impact, poor governance, and so on. In any case, the focus of the article is not to dwell on the issues and reasons for the issues but rather on finding solutions.
The New Companies Act
The New Companies Act came into force in 2013 and an estimated 1800 companies having either net worth of Rs. 500 Cr or more, OR turnover over Rs.1000 Cr OR Net profit over Rs. 5.0 Cr and have to spend a minimum of 2% of their Net Profit on Corporate Social Responsibility (CSR). The Act prescribes that CSR activities be focused on Environment, Health, Education and Livelihood in one way or the other. It is estimated that about Rs.8700 Cr per annum will be CSR spend just under the purview of this Act.(4)
The target CSR areas prescribed in the new Act are very closely linked with the issues our country is facing today. By the very definition of sustainability, they closely relate to Sustainable India and this synergy needs to be further intensified to take it to its logical conclusions.
India has huge talent pool comprising of technocrats, scientists, engineers, doctors, economists, intellectuals, and also an enviable natural resource base.
Agreed, that the corporates covered under the new companies bill will identify their CSR objectives and work on the same; however it will be governed at least to some extent by the business interests of the company. No doubt that this will create positive local impacts but if the whole or large chunk of funds was diverted to create a corpus, it can be then judiciously spent on the priority areas of the country. Such corpus will provide a substantial financial resource. If some small incentives are provided, many other corporates/individuals, which are not under the purview of the Companies Act may also contribute and further enhance this corpus. Instead of a localised scattered impact there is a need of a huge national level effort.
The Possible Solution
As can be seen from the foregoing discussion, it appears that the new Companies Act will boost CSR activities which are very pertinent to Sustainable India. What perhaps is missing is a structured and integrated approach that would ensure that the purpose is served to its fullest and issues which are handled are of national interest and importance.
It might be a good idea to form a central autonomous nodal agency which will drive the initiative of Sustainable India.
A model of such an agency is proposed below.
The Proposed Sustainable India Model
The author feels that there is a pressing need to form a National level Autonomous /Government /Semi-Government nodal agency with a mandate of “Sustainable India” which is depicted in Figure-1.
The Central Autonomous Nodal Agency will comprise of various domain experts who will put their heads together and crate a Sustainability policy for the country. Such a special task force may analyse all the relevant government and other databases and in collaboration with NGOs and other relevant stakeholders, formulate a comprehensive programme to address burning issues in a stepwise manner, assign them due priorities, and crystallise an action plan.
An independent agency comprising of NGOs and other special interest groups etc. can audit and monitor the progress of implementation of the action plans. The implementation shall also involve the local population to provide the workforce and also to create awareness among the communities about the importance of such programs.
Thus the proposed model will form synergies amongst the corporates covered under the Companies Act, NGOs, ongoing Government projects, Technocrats, Doctors, Engineers, Economists, and more importantly the local communities, to identify root causes for the problems and formulate implementation strategies to bring about Sustainable and Inclusive development. In the proposed model, the resource pooling and strategising shall be centralised and execution and implementation shall be decentralised.
Post economic reforms, there has been a significant surge in the Indian economy over the last two decades. Paradoxically in spite of this rapid growth, some fundamental issues pertaining to Health, Education, Environment and Livelihood are in desperate need of solutions. There is a synergy between CSR activities and fund allocations for CSR in the new Companies Act and the sustainability goals for the country. There is perhaps a need to integrate all the available human, monetary and technological resources under a central nodal agency, which can plan, develop and execute an action plan in a time-bound manner to ensure Sustainable and Inclusive development in India.
1. OECD “Better Policies “ Series – India , Sustaining high and inclusive growth, October 2012
4. CII – Awareness Program on National Voluntary Guideline and New companies bill , Feb. 2013.