Another Week in Delhi

But given India’s powerful bureaucracy which does not like the idea of power moving out of its hands to the private sector, one cannot ignore trip clauses coming into force in the absence of powerful political leadership capable of withstanding burea

Nov. 8, 2013, 5:45 p.m. Published in Magazine Issue: Vol.: 07 No.-10 Nov. 08 -2013 (Kartik 22, 2070)

Spending a week in Delhi always provides interesting insights on what roils Mughlani socio-politics and that across the spectrum from ‘inspiring’, through ‘good’ and ‘bad’ to the outright ‘ugly’. This trip just before Tihar to attend India’s annual water forum also provided me an opportunity to engage with academics, journalists and politicians as well as to “say it like it is” about what is happening in Nepal that does not get reported down South due to supine self-censorship in the face of glowering officialdom in India’s corporate media. The experience this time was surprisingly weighted towards the ‘good’ and even ‘inspiring’.

The TERI-organized water forum was an opportunity to understand how water problems are perceived in India, and the focus was on efficient use of water especially within the dominating political economy of agriculture, industry and urban water supply, a welcome departure from the approach of the last decades that was blind to wastage but which hoped to overcome all problems by just building new schemes, especially in the neighbourhood Himalaya. Interestingly, what were not discussed, despite a Bangladeshi expert’s feeble attempts to do so, were transboundary waters. Clearly, the latter is too complex an issue, and Indians seem to have realized that without rectifying their internal mess within this sector, they cannot hope to find solutions from across the borders, and even if they did, it would prove to be ineffective. It is a lesson India’s neighbours too would do well to heed.

          I was invited to attend another roundtable meeting organized by former water resources minister Suresh Prabhu with the Confederation of Indian Industries (CII), which proved to be an occasion I would have to term both ‘enlightening’ and ‘inspiring’, though not without its pitfalls as I will explain further below. The focus was CSR – Corporate Social Responsibility, an issue that has moved from simple feel-good whitewash in the cut-throat corporate sector to a law with some baby teeth that requires companies to spend two percent of their profits on social welfare. Having suffered 11 years in parliamentary limbo, this law recently passed the lower house of Indian parliament after it was pushed through by its younger (and better exposed to global trends) parliamentarians from the ruling and opposition benches.

It would mean that Indian corporations are conservatively expected to collectively spend some two to three billion rupees per year at current earnings on social welfare activities. A major corporation’s executive mentioned to me that his company had almost three million dollars equivalent to spend in Bihar’s flood amelioration efforts! As India’s growth picks up in the years ahead, this amount can only be expected to increase exponentially, said Suresh Prabhu, as he championed spending much of it on the water sector and specifically its growing but mismanaged urban water needs. As the minister for state for corporate affairs Sachin Pilot put it as chief guest, perhaps taking a leaf off the former King of Bhutan’s Gross National Happiness, this new law was about “how we become a happy country” getting the private sector to spend some of their profits at the local level on substantially improving social and environmental woes and “not on merely distributing halwa-puri” at religious events as India’s trading class has traditionally done.

          This initiative now puts India at the forefront of innovations in CSR, and this move is closely watched by the international community, especially the South-East Asians. Indeed properly steered through in the days ahead, India might end up taking global leadership in this area of corporate philanthropy in the 21st Century the way the US did globally for much of the 20th Century with its Ford, Rockefeller, Gates and other foundations. In the case of the US, its citizens can get tax exemptions of twenty to thirty percent for up to twenty to fifty percent of their gross earnings that they may donate to what are called 501(c) non-profit companies. Given that educational organizations in the US enjoy tax-exempt (and tax-exempting for donations) status, much of US individual philanthropy has veered towards building top class universities, hospitals and research establishments, unmatched anywhere else. On this front, US laws have made citizens through self-willed donations sovereign, not governments distributing largesse through tax earnings for political patronage.

While one could not help being infected by such enthusiasm as one heard at that CII meeting, India is far from reaching American standards, and this well-meaning initiative has equally great pitfalls ahead that could as well sink it badly. It is not that Indic culture does not have such genetic social memes to help it along on this path. There is the heavily ingrained religious norm that “giving daan (gifts) to Brahmins” would “help preserve Dharma”. That widespread cultural belief is the fossilized remains of a glorious ancient tradition that helped build Nalanda and Taxila universities two-and-a-half millennia ago, which today survive in perfunctory rituals bereft of its original meanings.

Properly revived, this meme could give strong competition to the best of individual and business charities anywhere in the world, and help build the basic foundations of India’s modern science that have remained more or less moribund where Nehru and Homi Bhaba left them. However, it is a long way to Nalanda from today’s India of high-level political corruption, bestial rapes and urban social insensitivity; but fresh wind from any direction always brings with it the whiff of hope.

The dangers ahead for this new initiative are many. For one, the nitty-gritty of the laws to facilitate and regulate these efforts are yet to be crafted, which is natural, as a lot of trial-and-error efforts will have to mark this route. But given India’s powerful bureaucracy which does not like the idea of power moving out of its hands to the private sector, one cannot ignore trip clauses coming into force in the absence of powerful political leadership capable of withstanding bureaucratic shenanigans, which shackle the process with deadweight rules that will make it near impossible to do business in this new way.

Both India and Nepal have enough such examples. In India, the first efforts to bring in the private sector into power generation failed miserably because the private sector, which wants to know only three words (“cents per kilowatt-hours” at which the state corporations would buy power), was made to comply with sixteen pages of submitted calculations that would require filling in details of how corporate chiefs travelled! In Nepal, the wonderful idea of the travel trade people getting to spend two percent of their profits to promote tourism got legally corrupted into two percent extra tax to support another meaningless bureaucracy, the Tourism Development Board!

Already a section of the Left has voiced opposition to the CSR legislation saying it panders to powerful corporations and allows them to set the social agenda instead of the government, and thus would end up being pro-rich and anti-poor. They argue for two percent additional tax on corporations that would go to government coffers for this purpose. This can be seen also as Leftist alarm against “public-private” partnership: the Red Left in India and Nepal have been weaned on a diet of “revolution around the corner” and any reform is viewed as counter-revolutionary and setting back the “inevitable” revolution instead of exposing the perfidy of the bourgeoisie to the masses. 

Another issue with CSR is that this Indian effort is limited to only big corporations, and they cannot spend it on neighbouring countries – and by corollary on India’s socially highly marginalized borderland areas where the social and environmental problems are most severe. It excludes small businesses and ordinary citizens and hence, far from being a mass-based movement, has the potential to remain confined to corporate dilettantism. Indeed, the executive mentioned above who had some three million dollars to spend in Bihar’s flood amelioration, when questioned about how he intended to go about tackling this problem, had only old ideas of check dams and afforestation, popular in the media but long debunked as bad watershed science. How Indian corporations will open themselves to critical new ideas and avoid the trap of old, failed clichés remains to be seen and carefully watched as it has the potential for changing the way philanthropy is done all over South Asia and beyond – for good or for bad – in the years ahead.


Dipak Gyawali.JPG

Dipak Gyawali

Gyawali is Pragya (Academician) of the Nepal Academy of Science and Technology (NAST) and former minister of water resources.

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