Day: August 8, 2018

Coming Up…Corporate Social Responsibility-2 percent rule

Corporates in India would now have to give an average of 2 percent of their profits to projects related to corporate social responsibility. Corporate Social Responsibility refers to holistic action taken by companies to improve positive social or environmental impact on the society.

The companies on whom the provisions of the CSR shall be applicable are contained in Sub Section 1 of Section 135 of the Companies Act, 2013. As per the said section, the companies having Net worth of INR 500 crore or more; or Turnover of INR 1000 crore or more; or Net Profit of INR 5 crore or more during any financial year shall be required to constitute a Corporate Social Responsibility Committee of the Board “hereinafter CSR Committee” with effect from 1st April, 2014. The pictorial representation below gives the representation of Section 135 (1).

This a huge positive development and would attract $2.9B (INR 20,000 crore) in investments for the social sector, a game changer looking at the improvised state of affairs in India for less privileged people. The danger would always be there that many companies would run shell companies which act as fronts for CSR activities while siphoning the money back to their businesses. But, the act greatly promotes accountability and transparency within the corporate giving system.

To be continued…

Bolivia Case Study: End of Poverty

Will write a bit about Bolivia and the policies implemented by Dr Sachs as covered in his riveting book The End of Poverty. The End of Poverty is a very detailed book and includes policy initiatives and impediments in removing poverty in many different countries. Bolivia suffered from hyperinflation and the remedy prescribed by Jeffery Sachs helped in stabilizing inflation and promoting growth. The article will ignore the factual pricing of oil in pesos or exchange rate between USD and Peso but rather conceptualize the thoughtful and analytical policy response to stabilize the economy. This will also in a way include book review.

Trickle-down Economics: End of an Era in the US

Last few months have been very tragic for the world and especially for the United States. Global trade war esp. focused on China, Iran sanctions and multitude of disrespectful tweets have become the norm now out of Washington. I have studied in China and the US, so have a very close experience with people from both these countries. Some of the best people I have met in life are Chinese and Americans. Graceful, advanced, measured and wholesome.

Anyways, I always tried to write a bit about Trickle-down economics. If you want to know a bit about American political and economic ideology which divides Republicans and Democrats, then the best place to start would be the 1980s era which implemented the so-called Trickledown  economics. The policy reduced taxes on the rich apart from disrupting social welfare programs hoping that it would stimulate entrepreneurship within the society leading to more jobs for the less privileged people in the society.

This is the greatest fallacy thrown to the world. The concentration of the wealth among the rich increased after the 1980s especially among the top 1% of the population. Moreover, Gini Coefficient, an inequality measure increased over the years. The higher the gini coefficient, the more the economic inequality among the population. Continue reading “Trickle-down Economics: End of an Era in the US”

Skip to toolbar