Dr. Madhukar Gupta is an Electrical Engineer, MBA and law graduate. He was selected as a Mason Fellow by Harvard for a Master’s in Public Administration. The Government of India sent him for a Master’s in Public Policy at Maxwell, Syracuse. He has been awarded a PhD n Economics in 2010. He is presently Additional Secretary, Ministry of Public Enterprises and Heavy Industries.

Dr. Gupta focused on Public Policy in US and China with experts on economic growth, public sector management, infrastructure, corporate finance and development at Harvard, MIT, Syracuse, Maryland, Cornell and Fletcher School. He has won many National Awards from NPC and NABARD. Indian and international Universities have hosted him as a visiting faculty and scholar, including BITS where he has been adjunct faculty for more than 20 years. Dr. Gupta has presented professional papers in nearly three dozen countries.

In an exclusive interview with Marie Banu, Dr. Madhukar Gupta IAS talks about the present trends in Corporate Social Responsibility in India.

Please share your experience on International training program on DFFT (Domestic Funding of Foreign Training).

When I joined the Government of Tamil Nadu in 1986, the Collector of Chengalpet who was based in Kancheevaram asked me to oversee the work in a village for three weeks as part of my training. The basic idea was to understand the village life in Tamil Nadu and see how it is different from villages across India.

After two weeks, the Collector asked me what I had learnt from the village exposure visits. I told him that Engineering and MBA has given me critical financial and analytical tools, but to learn about India I will have to start from scratch as I did not know much. He replied saying, “If you are aware about your own inexperience and inadequacies, you will be successful. If you think that you already know enough, you are possibly wrong.”

I worked with UN for a year and realized that a lot of things have already happened in India, which I was not really aware of. For instance, when the British were in India, 100 thousand Britishers were managing 300 million Indian people. As the number was less, a handful of District Collectors were invariably British. However, a lot had changed in the world thereafter and we need to learn from it.

What were the key lessons you learnt during the training period?

One of the lessons that I learnt during my training in Tamil Nadu was in management of water deficit areas. 60% of India is water deficient. If you see the onset of famines areas of Tamil Nadu, you will find Palmyra leaves turning yellow. Droughts and water scarcity were explained vividly and even today the State Government and Government of India depend on these old famine management systems.

Other countries have taken initiatives to manage water scarcity at country levels which includes offering entitlements at household levels. In fact, 50% of the states in the US have drought management mitigation plans. The world has moved on and there was a lot  to learn from other countries. I had more questions than answers about the way the world functioned.

When I returned from the UNDP, I applied to universities across the world  to learn more on development. Eventually, I was selected by the best universities teaching public policy and development, including Harvard. I focused on the US and China in a short span of time.

I studied the health policy in the US and realised that it cannot be followed in India as they have more resources for health management programs. If programs have to be laid out in India, they have to be more cost effective as we have issues like high growth rate, maternal mortality and child mortality.

You have been managing CSR policies in its maturity phase after its launch phase. What is the trend of CSR implementation among PSUs?

The difference between the public sector and private sector is that public sector exists for the greater good of the society. The bottom line, as far as the functioning of the public sector is concerned is to make reasonable profits and also, at the same time look after the greater good of society. 

When the CSR ACT was rolled out in 2013 (with effective from 2014), most of the PSU companies had no idea on the compliance issues as their CSR programs were coordinated through their implementation agencies.

India became the first country in the world to mandate CSR by legislation. Once anything is mandated by law, we don’t have a choice. All PSU’S had to follow the law. Government could have levied a tax and used this tax or cess in the manner in which they would have wanted to, but they didn’t do that. Our government’s basic objective was to leverage the capacities and competencies of corporations, public as well as private for the greater good of society.

It took a while for companies to understand the ACT because their core businesses were different and they did not have the expertise in this area. Many companies who were not engaging in CSR prior to 2014, hired experts or they had to learn from others. The first three years was a learning phase. Things are getting better now. Companies are clearer about what they have to do and what not to do.

Since the initial learning was in the traditional sectors, obviously the focus was on education or on health. Now, you can see a  change in the CSR expenditure relevant to sectors specified under schedule VII of the ACT. Corporate are now focusing on restoration of heritage, art and culture, sports, incubation of new technologies, environment conservation, etc.

Continuous efforts are being made to ensure that CSR spending is done right throughout the country. There is a provision for pooling of resources. Basically if more than one company will come together, they can act as a force multiplier. So every company, every entity has its own sense when they come together, their forces get multiplied.

How do you compare CSR implementation in PSU’s with that of private sector?

About 50 PSU’s are exceeding the desired 2%. PSU’s are not driven by the profit motive and in some ways they are doing even better than the private sector. At the same time, private sector is learning very fast so things are improving in this sector as well. Initially, some private companies who were not spending the 2% have realised that they have to spend this amount.