Context

The collaborative effort of markets and the Government are key to the development of a country.

How CSR law aids citizenry-private partnerships

• Section 135 of the Companies Act mandates corporates who are beyond a certain level of profits and turnover to pay at least 2% of their net profits before tax to the development space.
• Scope for collaboration with Non-state actors: This law gives corporates the necessary impetus to collaborate with non-state actors like Non-Governmental Organisations (NGOs) and Civil Society Organisations (CSOs). 
• Using the depth of engagement of non-state actors: Non-state actors, because of their depth of engagement with communities, bring patient capital to corporate board rooms and help the state, too, by engaging in welfare activities.
• Role of NGOs: A key pillar of democratic governance is citizens’ power to question the state.
• NGOs and voluntary groups/organisations have played a significant role in building capacities of citizens to hold governments accountable.
• Hence, Corporate Social Responsibility (CSR) grants, have assumed importance to provide the much-needed sustenance to NGOs and CSOs as key players in non-state governance.

How Non-state actors differ from Governments

• Risk-averse nature of bureaucracy: The Indian bureaucratic elite have little appetite for risk-taking and innovation because of the constant changing goalposts of their politician-bosses or because the quantum of work is more than what they can efficiently handle.
• Bureaucrats, therefore, often take recourse to the status quo even if it is to at least get some work done and not stall everything by campaigning for change, especially in the realm of governance.
• Fear of failure: There is also the fear of failure, with its deep-rooted consequence of non-risk-takers smoothly sailing to the top posts.
• In such contexts, it is the non-state actor who innovates and creates breakthrough models of community engagement.
• They also become the vehicle to carry the demands of people to formal institutions.
• We saw this in the case of the Right to Information (RTI) campaign, which became a law after decades-long efforts by NGOs.
• It is common knowledge that the District Collector calls on vetted NGOs/CSOs to implement various schemes during the normal course of the day or to step in at short notice when calamities strike.
• When non-state actors take a large load off the state’s shoulder, the state can focus more on governance.
• Research shows that it is the synergy of NGOs, Government and corporates which is the key to the development.

Conclusion

The CSR law has made the corporate world not only clean its own mess but has also created a legal framework for corporates to work with NGOs and CSOs. NGOs and CSOs in India, will play a major role in mobilising citizen action to right various wrongs.

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