Corporates can set a good example for the government by taking up some of the grassroot level and granular works like water conservation and redevelopment of ponds or lakes using CSR funds, where the State could not, and this also sets a benchmark on how the government can live up to the standards, said Tamil Nadu’s Finance Minister Palanivel Thiaga Rajan while addressing at the Tamil Nadu CSR Summit: Forging Partnerships & Impact Pathways, on Monday.

The event was hosted by Sattva in partnership with Dhwani Foundation and Madras Management Association.

While he was pursuing his education in the US, studying a business ethics course, Rajan wrote an essay on whether CSR should be a corporate’s core agenda and in it, he had argued quite lucidly that it should not. The shareholders of a company want the management and the board of directors to deliver the results for which they bought the shares for. They did not appoint them to be the guardians of the society, he had argued.

“However, contrary to my view on this subject (using CSR funds) 20 years ago, I am now of the opinion that in the course of the progress of society and the resolution of problems, there is a crucial role to be played by corporate entities that have the expertise, the requisite infrastructure, the skillset in the people that is sometimes, and in many cases ‘glaringly’ lacking in the government. Not only will you be of great benefit to the society, but you can prove the whole standard to which the government should be held accountable and can improve itself,” he said.

Unlimited flexibility?

Giving a parallel example in the State, Rajan said that in the recent Budget debate in the Assembly, many MLAs wanted unlimited flexibility on using the Constituency Development Funds — somewhat parallel to CSR Funds given to focus on grass root and granular problems that policy makers cannot. “I took it up with the Chief Minister and said it was not a bad idea. However, there were a lot of counter examples from the officials on how these funds can be mismanaged or misused. There was not much support to relax the guidelines and let it go free,” he said.

“However, it is good for the society if people are applying their minds in the CSR resources to the benefit of individuals and society. The question is how and under what kind of framework, and ethical constraints,” he said.