NEW DELHI: Amid the debate over making it mandatory for companies to spend at least 2 per cent of profits on CSR activities, RIL Chairman and India's wealthiest person Mukesh Ambani today suggested improving corporate social responsibility to Continuous Social Business.
"The purpose of any business cannot be only profit. Profit for the shareholders is important. But unless entrepreneurs have a larger purpose and businesses that change lives of millions of people, a sustainable business cannot be created," he said at FICCI's Annual General Meeting here.
"We will have to move from a model of Corporate Social Responsibility to a model of Continuous Social Business through enterprise and entrepreneurship," he said. "For that, we will have to create world class institutions with a soul."
"It is important to get the business of businesses right," he said, adding that the primary responsibility of business is social improvement.
The Parliamentary Standing Committee on Finance has proposed that companies should spend at least 2 per cent of their annual profits on CSR activities, but the industry has opposed the proposal.
Calling for increased spends from the government in healthcare and education, Ambani said that outlays in healthcare formed only 1 per cent of India's GDP, which he said needs to grow at least five-folds.
"Our demographic dividend, the youth and the young, are largely unprotected and uncared for. We will need to radically transform healthcare delivery to all our people," he said.
"Current food prices justify heavy investment and job creation has to be through agriculture and rural economic growth," Ambani said. He foresees an additional $ 500 billion opportunity for India in agriculture output.
The opportunity in Indian agriculture is as big as it is in energy, he said, adding that the country needs more policies like the liberalisation policy of 1991.
Stating that a large untapped opportunity existed for India to boost its under-leveraged consumer class, Ambani said the country's per capita income is less than $ 1000, one-third of China, while its per capita energy consumption is minuscule.
"Less than 1 per cent of our population uses credit cards for transactions and consumer loans are about 10 per cent of the total loan disbursals, representing an under-leveraged consumer class," Ambani said.
He said that India has grossly under-performed both in expanding access and improving the quality of education.
"In a fast moving world, we have not managed to make our education system contemporary," he said.
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