Five ways the Indian Companies’ Act, 2013 has impacted the civil society space

Civil society in India is recognised for fiercely protecting its independence and voice. With a social fabric marred by issues of exclusion based on identities, the Indian civil society has been working relentlessly on facilitating, protecting, and safeguarding the rights of those who are at the not-so-shining end of the development spectrum – the most marginalised and the voiceless. It has traditionally been working on complex issues of services and governance deficit, accountability, human rights and social justice, empowerment of the excluded and marginalised, and influencing policies and practices in their favour, to name a few broader areas.

The Indian Companies’ Act (2013) brought a promise with a seemingly disruptive potential of high resources through its mandatory Corporate Social Responsibility (CSR) obligations. The subtext of the provisions however worked as dampener to the exuberance that followed the Act by limiting the areas on which CSR investments could go. Needless to say, issues like human rights, social justice, addressing governance deficit and accountability were not part of the list.

Moreover, CSR came at a time when the civil society space, especially the civil society organisations (CSOs) were witnessing a reduction in the traditional sources of funding to continue supporting the work around complex developmental issues. Secondly, this time period also coincided with the change in approach and perspective on development problems and their solutions. The civil society space today is witnessing an overbearing emphasis towards technical approach and solutions to developmental problems due to multiple influences that are guiding other aspects of our lives.

All these factors have resulted in a shift in the way civil society space is perceived and how they are responding to development challenges.

1. Fitting the problems into the solutions paradigm: The nature of core business of a company often defines the nature of development problems it would support through its CSR. The emphasis on detailing and defining the processes and developing the ‘SOPs’ restrict the space to experiment, contextualise and provide radical solutions. With decreasing development aid from conventional sources, CSOs are retrofitting ‘available and acceptable’ solutions to complex issues. This increasingly worrying trend is likely to influence the debates around structural causes of development challenges and their solutions.

2. From patient investments to instant gratification: CSR typically supports shorter funding cycle making patient investments around difficult social problems harder. Due to the compulsions and nature of such investments, problems which are less complex and have a smaller shelf life are mostly found to be addressed and solved. There is an ever-increasing danger of shifting to an ‘instant gratification’ of development challenges where results are visible and tangible in shorter duration and without addressing the structural causes behind such problems.      

3. Rise of the neo influencer: Intermediate agencies are best poised to influence the ways in which CSR opportunities respond to development challenges and vice versa, due to their understanding of the needs and compulsions of the traditional civil society as well as the evolving CSR space. However, the determinants are their background and intentions. The civil society space stands to gain or lose immensely in this process. As CSR is fast becoming a lucrative and financially rewarding space, it also faces a challenge of getting crowded by agencies primarily driven by bottom line and not social or development causes.      

4. Positive change in its language and narration:With the emphasis on tangible and visible results along with empirical evidences the civil society language is changing for good. While questions like ‘What is my buck going to buy?’ is stretching it too far, the orientation towards defining, looking for and measuring change is ultimately going to benefit the civil society space to make a stronger and evidence-based argument for investments in complex development issues which are the ‘no go’ areas for CSR today.

5. Opportunity to shape CSR agenda and influence business responsibility:One of the brighter sides of the equation is the unparalleled opportunity for civil society to influence and engage with corporates. With an initial investment on trust building, there are possibilities to not only influence the CSR mandate towards addressing critical issues but also to open up the debate towards socially responsible business practices beyond just the CSR. As the space matures all stakeholders stand to gain immensely out of it. 

The civil society is poised with an interesting but worrying challenge of finding a way to keep the narration of the complexity of social development issues in the game and at the same time leverage from the seemingly disruptive potential the CSR resources unlocked through the Companies’ Act has presented.

About the Author:

Avinav Kumar works as the Head of Programmes for Change Alliance nurturing its non-profit affiliate – Partnering Hope Into Action Foundation. He has been working on social development issues since past 18 years.

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