Q.) What is the philosophy behind the provision of corporate social responsibility? Is it the same as or
different from the Gandhian idea of trusteeship? (250 words)
CSR :
• Corporate social responsibility (CSR) is a self-regulating business model that helps a company be socially
accountable—to itself, its stakeholders, and the public. By practicing corporate social responsibility, also called
corporate citizenship, companies can be conscious of the kind of impact they are having on all aspects of society,
including economic, social, and environmental.
• To engage in CSR means that, in the ordinary course of business, a company is operating in ways that enhance
society and the environment, instead of contributing negatively to them.
• Corporate social responsibility is a broad concept that can take many forms depending on the company and
industry. Through CSR programs, philanthropy, and volunteer efforts, businesses can benefit society while boosting
their brands.
• As important as CSR is for the community, it is equally valuable for a company. CSR activities can help forge a
stronger bond between employees and corporations; boost morale; and help both employees and employers feel
more connected with the world around them.
• For a company to be socially responsible, it first needs to be accountable to itself and its shareholders. Often,
companies that adopt CSR programs have grown their business to the point where they can give back to society.
Thus, CSR is primarily a strategy of large corporations. Also, the more visible and successful a corporation is, the
more responsibility it has to set standards of ethical behavior for its peers, competition, and industry.
• In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013. The CSR provisions within the
Act is applicable to companies with an annual turnover of 1,000 crore and more, or a net worth of Rs. 500 crore
and more, or a net profit of Rs. 5 crore and more. The Act encourages companies to spend 2% of their average net
profit in the previous three years on CSR activities.
Trusteeship:
• Gandhi’s idea of trusteeship is contrary to the idea of capitalism’s understanding of private property. Gandhi
argued that people with wealth should not look at their possession as their own and only for their personal
consumption. All wealth one has earned, even rightfully, should be visualized and spent as if it belongs to god and is
used for the benefit of community at large.
• One should only keep that much which is needed for satisfaction of basic needs. Rest should be used for public
welfare. This is because the wealthy is the trustee with whom the society and the god have kept their wealth with.
This should bring a sense of responsibility on the rich.
• Gandhi was largely impressed by John Ruskin’s work “Unto this last” for his idea of trusteeship.
Comparison:
In common parlance, we say that the modern idea of CSR is developed based on Gandhi’s thinking of trusteeship.
To some extent, it is correct also. Both involve a sense of commitment towards society and a larger stakeholder
group. Both visualize a larger moral community rather than a narrow understanding of private property.
But, the emphasis if different in degree. Whereas in trusteeship, one has to give away all except a basic minimum, it
is quite the opposite in case of CSR where only a tiny fraction has to be parted away with. The larger chunk is
retained by the wealth owner. In trusteeship, the rich is not seen as an owner itself in the way it is generally
understood. The owner of the wealth is god and public in general and rich is only entrusted to keep that wealth and
use it prudently. In CSR, rich is the owner and a fraction is to be used for public good just to recognise the role of
community in generation of that wealth.
Trusteeship is a spiritual concept also where cleansing of heart is also taking place when one works for the people.
It brings modesty. It emphasizes the idea of rich being a “Nimitt” i.e. medium. Being “Nimitt”, one sheds the pride
and arrogance that comes with the idea of richness. One doesn’t focus on material gratification but on better use of
money.
CSR, we have seen, has degenerated into a perception management technique. It brings better name and hence
better business to the corporations. The way it is used is also based on utilitarian consideration and not seen as a
spiritual calling.
Hence, we can conclude that though CSR and Trusteeship have formal similarity, they do have foundational
differences.
