Business and Community: The Story of Corporate Social Responsibility in India by Pushpa Sundar (review)

The book takes us on a fascinating journey tracing the evolution of corporate social responsibility (CSR) in India. A key idea that shines through the book is how the development of CSR in India is a result of an organic growth, which is shaped in many ways by important factors and events in Indian history. The book sketches the evolution of Indian CSR in elaborate detail by couching developments within a historical perspective, comprising of the socioeconomic developments as well as influences of personalities from the Indian freedom struggle and the business world. The author adopts a holistic approach in her analysis and eschews the reductionist approach of seeking a few explanatory factors. The author does take on an ambitious task, but the execution is cogent, yielding rich intellectual dividends. Another refreshing aspect of the book is the balanced treatment of the subject matter, covering both the successes and failures of Indian CSR. The book features concrete examples of grand accomplishments of Indian businesses such as the setting up higher education institutions such as the Indian Institute of Science and schools to advance women’s education. By the same token, the book also covers in detail corporate frauds and controversies such as displacement of small farmers by big industrial projects.

A preponderance of extant literature on CSR takes an inside-out perspective where the vantage point of analysis is the business. A striking point of departure in the book is that it takes an outside-in perspective, starting with society and looking into businesses embedded within society. An additional point of departure from extant literature is the emphasis on CSR as it emerges bottom-up within society rather than using conceptual definitions of CSR as the starting point and then analyzing the behaviors of businesses. These changes in perspective offer rich insights to extant literature.

Part 1 of the book deals with the period ranging from 1850 to 1990, which is further sliced into three segments. The author characterizes the time period ranging from 1850 to 1941 as merchant charity. Prior to the emergence of big business groups, India had a strong tradition of merchant communities involved in trade. These merchant communities enjoyed high status in Indian society and engaged in acts of charity both as individuals and as part of merchant guilds. Most of the donations were limited to local communities, focused on amelioration of distress, and driven by religious motivations. The author describes how charity was a means of gaining social status in the context of strongly entrenched caste hierarchy. Most importantly, social reputation was synonymous with credit worthiness in the society, ensuring that charity made good business sense. The author asserts that the time period ranging from 1941 to 1960 marks the emergence of modern industrial groups and with it the rise of corporate philanthropy. This was also the time when the focus shifted from charity to social reforms such as women’s education and poverty alleviation. This shift in focus and reinvigoration of philanthropic activities was also catalyzed by the vision of nation building set by personalities such as Mahatma Gandhi and doyens of business such as Jamsetji Tata. The author then shifts focus to the time period from 1960 to 1990, which was marked by escalation of social problems such as poverty and population growth. In this post-Independence socialist India, private businesses were heavily regulated and corporate tax levels were one of the highest in the world. This period saw a drastic reduction in corporate philanthropy and a rise in public distrust of businesses.

Part 2 of the book traces the time period between 1990 and 2012, when India moved from Nehruvian socialism that was marked by high tax rates and government control to a market economy encouraging private investment and lowering of corporate taxes. This period saw a meteoric rise in creation of wealth and with it a reinvigoration of CSR. The winds...