CII won’t mandate CSR for India Inc, says Mittal

NEW DELHI: A day after taking over as president of the Confederation of Indian Industry (CII), Sunil Bharti Mittal conveys a steady sense of purpose. He may not fully agree with the Prime Minister’s suggestion on pruning CEO and corporate salaries, but he is already talking of formulating a code of conduct for India Inc that will gently prod companies to invest in employee healthcare and education. The man from Ludhiana, who has taken Bharti Airtel to the pinnacle of success, would like much greater public-private partnership in developing infrastructure and bringing drastic reforms in the education system. During his tenure as head of India’s premier industry association, he would like to find solutions to most issues faced by India Inc. Mittal spoke to DNA Money at length about his vision and agenda for the next 12 months. 

Can what the PM said on CEO salaries be implemented? Is it true that large businesses are not doing enough, giving back enough to society?

You have to read the PM’s full speech…. He has said I celebrate your (industry’s) success and I am going to be standing behind you on a continuous basis. That is the overarching message. He pointed out that large sections of society are not becoming part of this success and some (industry) sections flaunt their wealth and spend ostentatiously, which creates additional pressure on those who are not part of the mainstream. We at CII are already working to develop a code of conduct. This will ask members if they are giving healthcare benefits, participating in the education of their employees’ children. This initiative should be in place within a month. But yes, CII is not going to mandate that a certain percentage of a company’s profits should be used for corporate social responsibility initiatives.

But is it true that business is not doing enough to address this issue?

Look at these big American businesses. They come from a garage, but build large educational institutions. Then all universities are endowed by them and they also get into healthcare. This is what the Tatas, Azim Premjis, Infosys, and Bharti Foundation are doing. Many of us in new age industries have begun to undertake similar initiatives. India has seen success (in business) for a very short period of time. It is my belief that as success grows, people will be more comfortable and will then start participating in nation building. Some young business houses have already begun making significant contributions to society and this will increase.

Any discord over the affirmative action plan within industry?

Not at all. But I would say small entrepreneurs may not be connecting to it as yet. CII’s effort would be to create 100-150 examples that encourage others.

What about appointing ombudsmen for affirmative action? Who would you consider appointing to this position?

The ombudsmen will measure and monitor what is being done in terms of affirmative action. Stalwarts of society are being approached for this purpose and they should be in place within a month or so. Four ombudsmen would be appointed at regional levels with one Central representative.

The strengthening rupee has hurt domestic manufacturing competitiveness. What do you think should be done about this?

The rupee has risen very fast and industry had no time to calibrate itself. But in the medium to long term, industry will get suitably adjusted to this fluctuation. Anyway, a rising rupee has also meant cheaper input imports … there is some negative fallout, but it is not a huge negative. The dollar and the rupee will find a natural level.

Manufacturing has been growing at a scorching pace but employment in the manufacturing sector has not been growing at all. Is this being addressed?

Manufacturing growth has to result in increased people hiring. It is not true that employment growth in manufacturing has been negative. In fact, it has shown a marginally positive growth in the last two years. Close to 13 million jobs have been created in the services sector associated with manufacturing because manufacturing companies get a lot of their work outsourced - such as transportation, handling. We must consider this aspect. But on the whole manufacturing should create more jobs and capacity correction in certain sectors will take care of this.

How does CII plan to resolve the conflict between farmers and industry on the issue of land acquisition?

Industrialisation is the way forward and for that land will have to be acquired. Earlier, smaller portions of land were being acquired and people’s (farmers’) aspirations were low. But this has changed……government should look at rehabilitating displaced farmers and industry is also ready to take on its share of responsibilities. Let the compensation (for farmers) be built into the acquisition price of land.