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22 Feb. 2019 | Comments (0)

Both India-based companies and foreign multinationals have a strong commitment to helping lift people out of poverty and creating a healthier and more sustainable India. Although the India Companies Act of 2014, which requires companies with a net worth above Rs 5 billion, revenues above Rs 10 billion, or net profits of Rs 50 million or more to spend 2 percent of net profits on CSR initiatives, is only five years old, companies are already exceeding the requirement in many aspects. The Conference Board’s Global CSR & Philanthropy Council saw this first hand and learned about the economic, political and social landscape of the country during our November, 2018, meeting in Guragaon, a city on the outskirts of Delhi that has quickly become a business hub.

About India[1]

With 1.3 billion people, India is a huge country and has an infinite number of issues. The government—both national and the governments of the 29 states—often consider philanthropy to be a minor player in resolving these issues. For example, a nonprofit program to help 10,000 people is not significant in such a large country. Scale is needed to affect real change. The government welcomes the opportunity to enter into partnerships with companies that can innovate programs and develop proofs of concept which the government can then scale. Opportunities are particularly strong for companies to partner with governments at the district level (there are 700 districts in India), which is much more manageable than working at the larger state or national level.  

India has a strong economy and steady growth track. Other key facts include:

  • Per capita income increased 78 percent between 2011 and 2017
  • Thirty-two percent of the population live in cities
  • Forty-eight percent of the population is under 25
  • There are now 300 million bank accounts, which is important for consumption
  • Today, India is the world’s sixth largest economy and it will be third by 2030.

All this means there is a lot of opportunity for growth and for people to grow into the consumer class.

Income classes

Class

Percent of population

Income categories (USD)

Affluent

10%

$14,000 or more

Middle Class

7%

$7,000-$13,999

Lower Middle Class

8%

$4,000-$6,999

Lower Class

75%

<$4,000

Total middle class (15%) grew by 12% between 2011 and 2017.

CSR and the council meeting

India is the first country in the world to make corporate social responsibility (CSR) mandatory, following the amendment to the Companies Act. The policy can be complicated, but the CSR Reporting Survey from KPMG India (which hosted the council meeting) is a helpful guide. One of the related sessions we hosted for the meeting was a discussion with the leader of the India Institute of Corporate Affairs, which oversees the regulation for Prime Minister Narendra Modi’s government.

The council meeting also comprised presentations, working sessions and site visits:

Presentations

  • Nielsen provided an overview of the India consumer. The presentation noted that content is influencing relationships, personal interactions, and buying decisions while also exposing Indian consumers to global markets.  Some trends include:
    • Consumers are seeking convenience
    • Healthy is the new wealthy
    • Eating out is fine (not just for special occasions)
    • Premium is not unaffordable anymore
    • Cost of time supersedes expense of service. 
    • Prabhat Pani, Head of Partnership and Technology of Tata Trusts, discussed the group’s focus on sustainable impact. The Trust has determined digital literacy to be a key life skill for the future and Tata has a partnership with Google to spread digital literacy at scale. Already, there is progress—in 2014, one in 10 internet users was a woman; today it is almost four in 10. It is also giving the title of slum lands to slum dwellers. So far, 50,000 certificates of land rights have been granted through 500 slums. Land ownership can bring slum dwellers into the banking system because these people now have tangible assets. More information is available here.   
    • Clean India discussed its goal to construct 110 million toilets by October 2019, the 150th anniversary of the birth of Mahatma Gandhi. Almost half of the Indian population still practice open defecation, which causes the spread of many infectious diseases and contributes to high child mortality and unsafe food and water. The Indian government has provided incentives to households to install toilets and Clean India is helping with that.

Site visits

  • The National Association for the Blind, whose mission is to empower the blind and multi-disabled. The association’s digital literacy center is supported by the National Association of Software and Services Companies’ NASSCOM Foundation, which boasts more than 3,000 software companies as members, including several members of The Conference Board.
  • A model village of the Aditya Birla Group, which is working to transform 5,000 villages across India. The model villages are designed to ensure self-reliance in all aspects, including education, health care and family welfare, infrastructure, agriculture, and watershed management. More details are available in this video.

The sentiment from our meetings with business and nonprofit leaders was that companies need to give back to society and that CSR is an important way of doing business—not an obligation. While our time in India was primarily focused on the country’s challenges and how business is actively part of the solution, our council also had an opportunity to experience some of the rich culture, epicurean delights and vibrant markets of the country. We were masterfully hosted by Fluor, KPMG and Aditya Birla Group and the conclusion of the meeting coincided with Diwali, the festival of lights. The children at one of the schools we visited made us Happy Diwali cards and wherever they were displayed, we marveled at the beautiful sand art called rangoli. As the Global CSR & Philanthropy Council explores the world to discover corporate citizenship best practices, we do stop to smell the roses so to speak. In the case of India, it was saffron, turmeric and of course curry!


[1] Data source for this section: Amit Bali, “State of India Consumers,” presentation to the Global CSR and Philanthropy Council, November 2018.

  • About the Author:Jeff Hoffman

    Jeff Hoffman

    Jeff Hoffman has a distinguished history working with corporations, non-profits, civic and government agencies on strategic direction and innovative programs.He leads Jeff Hoffman & Associates, a …

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