Perspectives from ISB

By Gaurav Dalmia, Chairman of Dalmia Group Holdings.

India’s corporate sector has been very responsive to social issues. Five years ago, India enacted mandatory provisions for corporate social responsibility spending. Annual social spending by the top 500 companies has since increased from Rs 8,800 crore to an estimated Rs 11,500 crore this year. As expected, education and skills training has attracted the most funds, followed by water sanitation, hygiene and healthcare as a clubbed sector, both together taking in more than 61% of total CSR spending.

Yet, dilemmas abound. Technology entrepreneur Sanjeev Bikhchandani wonders whether old fashioned employment generation should be the highest social objective in developing countries. Naveen Jain, from Silicon Valley, questions whether any initiative could scale without a business motive and whether businesses catering to the bottom-of-the-pyramid are the best bets. Rohini Nilekani espouses that charities should not be scared of experimentation and failure, as all change involves dead ends. TED founder Chris Anderson is an advocate of “beyond the horizon” challenges that can only be solved by collective action. Much like technology disruptors, Bill Gates recommends going after big challenges, not necessarily the sexiest, and has hence focused on vaccinations, claiming that $1 spent on immunization has a $44 economic benefit. In our own foundation, we have debated whether engaging with the government on areas of common interest will propel us forward or divert our energies. There are no easy answers.

People’s world views are overwhelmingly shaped by their experiences. A recent study by Crowdpac found that people in academia and the entertainment industry tended to skew towards liberal thought; agriculture and mining workers embraced conservative thinking; manufacturing executives were mildly on the liberal side while Wall Street-types were mildly on the conservative side.

Similar diversity is clearly seen in the giving patterns of corporate India. Take the top 3 sectors contributing for CSR spending in India: petrochemicals 22%, banking 21% and information technology 14%. Their spending patterns are very different. Petrochemical firms are less inclined to spend on beyond-the-horizon solutions as compared to financial firms. Temperamentally, information technology firms find it easier to back innovative concepts while dealing with social issues. This heterogeneity in thinking can be a powerful force. But the size of the challenges and the plethora of possible solutions can sometimes be paralyzing.

Here’s a trick question: what is the biggest challenge facing the world today? Depending on your vantage point, the answers could be many: North Korea or the risk of the Thucydides Trap in the US-China trade war; unsustainable pollution or climate change; poverty or hunger or displaced immigrants from war torn regions; mindless materialism or political Islam; and Donald Trump, if you were to hear conversations amongst the New York intelligentsia! The way I see it, while all of these are burning issues, the greatest threat to the world, as British explorer Robert Swan succinctly put it, “is the belief that someone else will save it”. There is no “someone else”. It is up to us.

It is up to us to be citizens and not just consumers, to think deeply about what is important to us, and to put our best foot forward. Each of us have different things that touch us, different resources, and different solutions. India’s elite — amongst them the educated and resourceful 100 million upper middle class — have a conscious choice to make.

India ranked 130 out of 189 countries in the latest Human Development Report released a few months ago. Though this rank seems low, India’s Human Development Index improved almost 50% from 0.427 in 1990 to 0.640 last year. Such improvements happened on the back of economic growth as well as increased contribution towards development expenditure from private sources. Analysis by Bain & Co shows that while government contribution has been increasing at 4% annually, private sector aggregate contribution is increasing at 25%, and individual philanthropy has been growing at an astounding 44%. India surely has reasons to smile!

British playwright George Barnard Shaw said: “Money can represent health, strength, honour and beauty, just as it can represent illness, weakness, disgrace and ugliness”. To me, these are dimensions along a continuum. India’s wide-based commitment is a force for many profound changes that will compound over time. Let me try and predict the future: India will stand on the cusp of honour and beauty!