Corporate Social Irresponsibility

The honorable PM chaired the first meeting of the Governing Body of the Anusandhan National Research Foundation (ANRF) established to promote research and development and foster a culture of research and innovation throughout India’s Universities, Colleges, Research Institutions, and R&D laboratories. ANRF acts as an apex body to provide high-level strategic direction of scientific research in the country as per recommendations of the National Education Policy.  ANRF forges collaborations among the industry, academia, government departments, and research institutions. ANRF came up through an Act in 2023 with a five-year outlay of Rs 50000 crore.

The PM spoke on the need to identify and remove obstacles in the research ecosystem and focus on localized solutions to global problems. The discussion revolved around a ‘hub and spoke model of pairing universities where research is at a nascent stage with top-tier established institutions in mentorship mode’ and to launch ‘programs on solution-focussed research in a mission mode in select priority areas and adopt best global practices One aspect that has come up is “active participation from the industry” which we should dive deep into. The budget outlay for R&D in 2024-25 was Rs 100000 Crore and according to papers published by the Department of Science and Technology, the Gross expenditure on Research and Development (GRID) was Rs 127381 Crore in 20-21 which is about 0.64 % of the GDP, with the contribution of the private sector in research around 37 % of the spend and that too in areas like IT, Textiles, and Pharmaceutical. As per UNESCO reports, most developed nations spend more than 3.5 percent of their GDP on R&D. Interestingly against the 40 % of GERD spent by India’s private sector, in the US the private sector spends above 70 %. Now the question is with the increasing role of the private sector in the nation's GDP should the private sector be mandated to spend on R&D?

Well, it is a debatable topic. However, when we have an objective of becoming a VIKSIT BHARAT by 2047, our export competitiveness and quality of manufactured products should improve multifield, and for this expecting the government to spend taxpayers' money is unwarranted.  India has more than 900 universities and 39000 colleges of which 78 % are privately managed but we have not seen a remarkable alliance between the corporate sector and private educational institutions in setting up a research center and funding individual research projects as seen in other countries

According to Company Law 2013, Every company having a net worth of rupees five hundred crores or more, or turnover of rupees one thousand crores or more, or a net profit of rupees five crores or more during any financial year shall constitute a Corporate Social Responsibility Committee of the Board and as per schedule 7 of the Act various activities have been included in the domain of CSR which are much of social upliftment projects. When the GDP is growing with the share of the private sector increasing as a share of the GDP, is it prudent if the company law is amended to make corporate research funding mandatory under the CSR policy or make R&D a compulsory spend on profits accrued by the corporates thereby creating a compulsive flow of capital for research either by setting up research cells or through collaboration with academia?   

We are aware that the government's sincere effort in slashing corporate tax was to create capital spending for employment which did not take place instead, the corporate sector used the benefit only for cleaning their balance sheets. It was reported that India Inc’s corporate social responsibility (CSR) spending in FY23 grew slower than the average net profit of companies for the same period. In such a scenario of corporate social irresponsibility should we think about compulsive spending on R&D by select sectors? Well, I want to open this Pandora’s box for public debate

( Views expressed are purely personal and do not reflect the views of Institutions that i represent )