Moral Policing & CSR: Government Wants India Inc. to be Beacon of Good

Are we heading toward a world where nothing sticks without government regulation stepping in? Only last week, the Indian government offered businesses the ease of putting their CSR reports online, in an attempt to encourage reporting as well as using the online forum to evolve informed regulation. This was mere weeks after a minister suggested that India businesses consider a CSR stock exchange where they could exchange credits for "doing good" and hopefully boost more accounting.

Today, India's Corporate Affairs Minister Salman Khurshid indicated that Corporate Social Responsibility could become a written law! "You can't hope that everything will work without a basic legislative line drawn. But where that line should be drawn must come by way of consensus from industry," he said. Seems like the Indian government is moving toward declaring an all out war on businesses and their CSR quotient.

Let's take a step back and analyze the history of India Inc. For decades, Indian businesses have defined social responsibility to mean philanthropic work, charities, supporting nonprofits and corporate donations. Now, with everyone talking about CSR, escalated by all the hoopla generated by Copenhagen, climate change declarations, and the recessionary economy, it is quickly becoming top priority for the government as well.

Regardless of the frenzy of debates this initiated in the blogosphere last month when talk of a possible "stock exchange" was espoused by Khurshid, it is worth noting how quickly the government is moving on the subject. For one, they want it known that it isn't yet another inspirational goal that never gains traction once announced, but one they mean to move on. Add to this conviction, the very recent Satyam debacle, staking claim to India's largest corporate fraud, and you get a government and business community eager to clear their records. While he emphasized that they did not want to move toward becoming "moral policemen" for businesses, he added that if they fail to "convert CSR from a philosophy to real deliverables" intervention would be inevitable.

Although I have commended the Indian government in the past on their effort to recognize the need for CSR reporting and more pronounced initiatives by the private sector, this time I cannot help feeling that they might just be rushing this a little too soon. Putting the private sector and its corporate governance on a pedestal might not serve the community well. And declaring it the beacon of good and a possible "laboratory for good political governance in India," might be taking the effort too far. India might be forging ahead economically, but this declaration of possible mandatory reporting in a country which remains dependent on small businesses and mom-and-pop shops, might just end up sounding hollow, provincial and fail to prove the point.

Do you disagree? Is regulation the only answer sometimes? Leave a comment or email In Good Company. And if you are Twitter-inclined, follow me @VaultCSR!