Business and Politics: Partnering for Iniquitous Growth?

Prime minister Manmohan Singh’s exhortation to the corporate rich at the annual summit of the Confederation of Indian Industry last month to “resist excessive remuneration …and discourage conspicuous consumption” has been the cause of some perturbation in corporate circles and the media. In the din that followed the larger message got lost. The prime minister had earlier in the month released a Report to the People on the completion of three years in office of the Congress-led United Progressive Alliance government, claiming that his government had ushered in a process of “inclusive growth”. That the government has failed on this count (‘Promoting Inclusive Growth?’, EPW, June 2, 2007) does not disqualify the prime minister from reminding the principal beneficiaries of the present private corporate investment-led growth process of their “social responsibility”. In his speech to the captains of Indian industry, Manmohan Singh outlined the “challenges for corporate India” that an “inclusive growth” path entailed, these in the form of a “10point social charter”.

In a gist, Manmohan Singh’s sermon went as follows: respect your workers and “invest in their welfare”; do not let corporate social responsibility (CSR) be shaped by tax planning strategies alone; implement affirmative action in favour of the scheduled castes, scheduled tribes, other backward classes, minorities and women; resist excessive remuneration for yourself and discourage conspicuous consumption; desist from noncompetitive behaviour; invest in “environment-friendly technologies”; fight corruption at all levels; and so on. But the limitation of preaching is that it appeals solely to one’s sense of morality, which is distinct from appealing to the law and, in this case, asserting the rights of the various stakeholders (as opposed to merely the rights of shareholders) of business. It needs emphasis that much of the above that the prime minister was morally persuading big business to follow – whether implementing worker benefits or eschewing monopolistic practices – come within the purview of the law and plain speaking would have required stating that business can legitimately profit only by working within the framework of the law and ethical custom. The problem with all the talk about CSR today is that the legal dimension is given the go-by; in practice, corporate philanthropy has become a substitute for the responsibility of business to act legally (and ethically).