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Corporates, Government and Non - Governmental Organizations : Changing Roles in Development

 

By - Shashi K. Sharma

When we talk of development, the instant image that comes to mind is of certain activities or processes taking place for the betterment of our present and future generations, by uplifting their standard of living. As the title suggests, the author tracks the changing roles of the three major stakeholders in the society, viz. the government, Non-government Organisations (NGOs) and the corporate sector, in influencing the process of development. Beginning from the British Raj and tracing its way up to the present development scenario in the country, the article shows us how the above players have metamorphosed into efficacious entities in bringing about the process of development.

Working separately, the impact of the above three entities is limited to a certain extent. Keeping this in mind, the author opines that if all three work hand in hand with each other and realize that they are striving towards achieving the same goal, i.e., progress of the country, it would surely be the beginning of a new era in the field of development.

Glass is half-full or half-empty - the classic paradigm difference which distinguishes an optimist from a pessimist is very appropriately applicable to India today.

On the one hand, we have a GDP growth rate projected to be a very healthy 8% to 9% per annum; India is considered to be a potential future super power; we are one of the shining stars of economic well - being labeled as BRIC countries ( along with Brazil, Russia, and China ); our resilience and resistance to recent economic recession has been widely appreciated etc.

On the other hand, we have some of the poorest indicators of socio - economic development. The literacy rate is abysmally low; measures of Health like Infant Mortality, Morbidity etc. are a testimony to the poor performance of India in the Health sector; skewedness of the benefits of growth is glaringly evident with rich getting richer and poor getting poorer.

As ranked by Transparency International we are one of the most corrupt nations in the world. According to some reports, Indian money stashed away in overseas tax havens exceeds USD 1 trillion. Erosion of Ethics is conspicuously evident everywhere - whether in multi-crore scams perpetrated by venal politicians and corporate leaders ( Koda of Jharkhand and Raju of Satyam, just to name two ) or in the day-to-day brazen violation of traffic rules by the urban elite.

Female foeticide, wide - spread superstitions (even among so-called educated intelligentsia), discrimination against women, deep - rooted casteism, almost total lack of civic sense (inter alia, demonstrated by repeatedly very low voter - turnouts) etc. would make an objective observer wonder whether India has really stepped into the 21st century at all ??!

From the perspective of the classical "four estates" of the society, the picture is not too bright either. "Legislature" is mostly inhabited by politicians who operate under the shadowy umbrella of the politician-criminal nexus. Their shamelessness and high-handedness has reached such proportions that India, per force, has to be labeled a "flawed democracy" if at all it can still be called a democracy.

"Executive" - Called the "babus" by enlightened journalists, are mainly interested in their own promotions, postings, perks, and politics (organizational game playing). The "steel frame" has rusted and, as pointed out by Mr. Arun Shourie, is in the danger of collapsing. Guaranteed job and practically no performance appraisal lead to a total lack of accountability.

"Judiciary"- That is one part of the Governance system which continues to hold out some hope. Though there have been instances of moral turpitude in judiciary also but by and large the general public still puts some faith in judiciary which has been from time to time justified by the proactive stance taken by various judges. RTI and PILs have illustrated that society can expect appropriate support for Development from this arm of the society. Humongous backlog of pending cases is a burden which carried by the judiciary for a long time but it appears to be a solvable problem if the will is there.

"Media" - The "fourth estate" has a mixed record in living up to society's expectations in nurturing developmental processes. But again, broadly, Media has been vigilant and alert to negative forces in the society and has raised its voice, quite effectively at times, to help the people and to overcome hurdles to progress.

In the context of Development, it is necessary to talk about two other entities in the society who play a crucial role. One is Non-Governmental Organizations (NGOs). They have been given many other labels also like voluntary agencies, community based organizations, etc. Though NGOs are relatively new entrants in the developmental process, overall they have been making a very positive impact and one could hold high hopes from them in the future.

The other entity is the Corporate sector - encompassing big or small enterprises in all fields whether delivering products or services to the society. As we shall discuss later, Corporates have moved beyond merely doing business and making profits for themselves, to playing a larger direct hands - on role in Development.

Having taken a critical, maybe somewhat harsh but well - intentioned, look at the classical four arms of the society, it would be useful to quickly visit a perspective on Development.

There have been enormous number of studies on Development - by economists, by sociologists, and many other segments of the academia - but let us try to put together a somewhat simple and action-oriented perspective.

Development - comprehensively taken to encompass economics, technology, social processes, health, agriculture, infrastructure, education, etc etc - has been a constant striving for all societies and nations. From a managerial perspective, there are many questions that can be asked with respect to development :

  • Who is responsible for development?
  • Who should benefit from development?
  • Who should decide about resource allocation?
  • Who should 'pay' for development?

Collectively taken together, one could ask a simpler question - "who should play what role in the development process."?

An attempt is being made below to answer this question in a dynamic temporal framework; particularly in the context of some major players (some of them have been identified and analysed earlier and some are being introduced as additional entities) who could and are expected to play different and important roles -

  1. Government - This term combines the Legislature and Executive arms. At a stretch even the Judiciary could be included here.
  2. Non - Governmental Organizations (NGOs)
  3. Corporates (or business enterprises)
 

Media is mainly expected to play a watchdog and documentation function rather than actually taking up ground level developmental activities.

 

Government

 

Government, in the modern sense and as opposed to the myriad kingdoms and feudal states that dotted the Indian countryside in the past, emerged in our country during the days of the British rule. In that era, the connotation, meaning and objectives of Development were quite different. Foreigners were ruling the country. Their main interest was in their own well-being and therefore related type of Administration - maintaining law and order, collecting taxes, etc.

No doubt, lot of development took place, particularly in infrastructure (railways, postal system, etc.). But the main objective of the then-Governance was to facilitate the ruling of the country - the continued welfare of the rulers was the aim of development. In the process, if the people of the country benefited, it was just by the way.

Once the country became independent and we had a government, "by the people, of the people, and for the people", government became a central, and in many ways, the only player in the development field. Ideologically, just after independence and for a long time thereafter, the government believed in a socialist model of development, inter alia, depending upon central planning and control on all economic and social processes. The paradigm of development related to models and activities like: the five-year plans; setting up of public sector undertaking to command the heights of the economy; licenses and permits to control investments and resources allocations; etc.

Over the last two decades or so, the paradigm of governance has changed - first gradually and then at an accelerated rate. Under the influence of national and international forces, the economy is moving towards more and more liberalization, privatization, and globalization. Government wants to become a facilitator and regulator rather than an active player in development. The process has just started and is being implemented cautiously under a close watch and rigorous monitoring, so that there is net social gain and also that vulnerable sections of the society are not unduly hurt.

It would not be an exaggeration to say that in some ways government is withdrawing from certain fields of development, and that is leaving a vacuum. To a certain extent, this has been necessitated by severe constraint on (democratically garnered) resources and the need to allocate these to relatively higher priority areas, as perceived by the powers that be. It could also be attributed to an introspection on the part of various arms of the Government and a, rather reluctant (?), admission that they have not been able to deliver the goods. In the worst case scenario, it could be simply an abdication of their responsibility.

 

Non-Governmental Orgnizations

 

Non-governmental Organizations more or less did not exist during the British Raj. The then paradigm of governance did not allow for that (other than as anti-rule forces!!)

After independence also, it took a while for NGOs to emerge. It could possibly be said that immediately post-independence, individuals who comprised the government were themselves of the NGO mindset - at least in terms of their proximity to the 'common man' and a sense of selflessness. And therefore, there was no felt need for any intermediary for articulating collective desires of the people relating to different aspects of development and then responding to those in terms of related programmes and projects.

In due course, the primary functionaries of government - namely politicians (Legislature) and bureaucrats (Executive) - became rather distant from the people. In that context, the NGOs emerged as a link - both for expressing people's point of view and for providing a channel for resources delivery meant for development activities.

Government also realized that there were lots of advantages to enrolling NGOs in the development process : NGOs are motivated and enthusiastic; they have flexibility in operations; they are close to the people; they provide additional manpower to conduct developmental activities.

In today's context, NGOs have become an integral part of the process of development and are shouldering more and more responsibilities in diverse fields. In recent years, the number of NGOs, their geographic extent, their diversity (in domain areas), their resources channelisation and, in the ultimate analysis, their impact have all increased.

 

Corporates

 

In the early 20th century - to continue the time parity - the business world was more or less insulated from the concept of development (though business did participate in the economic processes). Around the time of Independence, Mahatma Gandhi proposed the concept of trusteeship, allocating a larger role to business in managing social resources for social development (and not only for business per se). And this responsibility was ably taken up by many business houses like the Tatas, the Bajajs, etc., who began to allocate funds and other resources to development.

Many eminent economic thinkers - like Milton Friedman - have very categorically proposed that corporates should stick to making profits and not get involved in development. Fortunately, in many experts' opinion, this viewpoint has not made much impact. Increasingly, the corporates are realizing that development is necessary for their own growth. A business enterprise is also an integral part of the society and therefore must address the same concerns regarding infrastructure, poverty, environment, education, energy, health, etc., as other constituents of the society.

Whether out of enlightened self-interest or out of pure goodness-of-heart, corporates are dedicating more and more resources - in cash and kind - to development. Many business enterprises have created organizational units - in the form of charitable foundations - which have the sole mandate to get involved in development.

Corporate Social Responsibility (CSR) has become a new buzz word in corporate circles. Some are treating it as a fad and / or part of their public relations strategy; others are making serious and genuine efforts to give back to the society through supporting development processes and activities.

It would be worth mentioning some concrete information and examples in this context. The house of Tatas have established an entity called "Tata Council for Community Initiatives" which encourages and guides various Tata companies to take up extensive CSR projects. It is a non-trivial effort, and though accurate figures may not be available, it is estimated that the CSR budgets among Tatas may exceed Rs.100 crores per annum.

Enlightened corporate leaders like Azim Premji of Wipro and NR Narayana Murthy of Infosys have created corporate foundations which are dedicated to contributing in their respective chosen ways to alleviation of poverty in rural areas, eradicating illiteracy, improving healthcare facilities, etc.

Many other companies are entering into partnerships with NGOs to contribute towards development. In such partnerships, the NGOs carry out the actual grass-roots activities while the corporates provide funding support as well as bring in a professional management approach to project management, efficient and effective utilization of resources, monitoring progress through pre-identified milestones, and objective assessment of impacts.

Several companies are encouraging their own employees to do volunteer work in whatever field they choose (as long as it is relevant and effective). Voluntary activities could be quite diverse and may involve, inter alia, teaching slum children, spending some time with critically ill patients, doing "shramdan" for say tree plantation etc etc. When employees go out for such volunteer work, they are considered to be on-duty and are paid their full remuneration for that period.

Technology and innovative thinking have brought in new ways of enabling corporate contributions towards development. For example, there are NGOs who link up with willing corporates and using computers and relevant information technologies allow employees to contribute, say, one day's wage every month to a cause of their choice.

Sterlite Technologies Ltd. (a company mainly involved in optical fibers and power cables) have been able to implement, what is called a "P-P-P" partnership model. STL have a project in partnership with Indian Red Cross Society to provide primary healthcare services to some remote villages through a mobile medical van. The capital cost of the van was provided through the local MP's area development (MPLAD) fund. This is the first "P" - Public (or Govt.). All the operating costs (including fuel, maintenance, salaries, medicines and other medical supplies, administrative overheads, etc) for the mobile medical van are supported by STL - and that is the second "P" - Private. The third "P" is People and their involvement has been ensured by carrying out awareness campaigns and bringing in the participation of sarpanches and other local opinion leaders in respective villages.

Cummins India Foundation had entered into a partnership with an NGO called the Door Step School which resulted into a very impactful developmental project designated as the "School-on-Wheels". A bus has been built-up, equipped and configured like a full-fledged classroom. Trained teachers accompany the bus to pre-designated locations where children come to the bus-classroom and are taught the 3-Rs (reading, writing, arithmetic) as well as other normal school subjects appropriate to the age groups. This project has been particularly impactful and successful in the context of the children of construction labourers. Such labourers work at one site for some period and then move on to another site. The School-on-Wheels is able to "follow" such children and provide at least some continuity in their educational process. This model also obviates the need for any permanent infrastructure (like classroom etc) which most builders are very reluctant or even refuse to provide at their construction sites.

There are very many such examples of corporates participating in and contributing to the development processes of the society in today's India. It would not be practical to attempt to list all such projects and / or activities.

At a somewhat macro level, corporate sector associations like the Confederation of Indian Industries (CII) have become actively involved in the field of CSR and in collective discussions of their constituent members it is being mentioned as a norm that 1% of net profits should be allocated to CSR and development related activities. ITC Ltd. and CII have joined hands to set up a centre of excellence in CSR in Chennai.

 

Some Possible Trends

 

Here is some wishful thinking, some recommendations, and anticipation of some desired trends.

There is a convergence and complementarity emerging in the roles of government, NGOs, and corporates, vis-a-vis development. Government is strapped for resources (managerial as well as economic) and is now, hopefully, realizing its limitations.

NGOs have become more articulate, more knowledgeable, more experienced, and more impactful in development but realize the need for using concepts and techniques from the discipline of Management (already available with and being practiced by the corporates) to improve efficiency and effectiveness of their efforts in the short-term as well as in the long-term.

Corporates have surely realized their responsibility towards the need for development in the society and for taking an active part (inter alia, for their own enlightened self-interest). They have a keen desire to contribute, and also have the requisite material resources and managerial expertise but are somewhat inexperienced in the field of development.

In this scenario, it would be optimal for corporates to pitch-in with resources, and equally valuably, bring in an attitude of higher accountability and efficiency, as well as a penchant for monitoring progress and for objectively measuring the results and the impacts.

The NGOs could be the delivery arm (for developmental activities) - carrying out the actual fieldwork in a manner responsive to the people's needs and with effective and efficient utilization of resources to achieve desired goals.

The government could play the role of a facilitator by providing a conducive policy and regulatory framework - for example, through appropriate taxation laws which can provide incentives for corporates and NGOs to take up an increasingly extensive role for the development of our country.

Media, as said earlier, could play the role of a watch dog, whistleblower, and a documenter. Through their efforts success stories could be shared, due credit, recognition and appreciation could be provided. Such stories could provide role-models to corporates and NGOs who aspire to play a more pro-active role in development.

Of course, for this new paradigm to work effectively, each of the abovementioned entities will have to recognize one another's role, trust one another, and accept the supra-ordinate goal that all of them are striving for a common objective- i.e.development of our country.