Development Administration in Tamil Nadu Part 3 in English

Every businessman earns prosperity from business and should give back the benefit of this prosperity to society. This is voluntary. This benefit is the moral responsibility of business. As this benefit is supposed to be passed on to society, it can be said to be social responsibility of business.

The above mentioned are the facts why Business is expected to be responsible to society.

Mahatma Gandhi suggested that “those who own money or property should hold and use it in trust for society.” Businessmen should run business firms not for their self- enrichment but for the good of the society.

Any business unit can survive and grow only when there is law and order in society. If business exploits the weaker sections of society for too long, these sections will take the law in their own hands. The resulting chaos will threaten the very survival of business.

A business organisation is a coalition of several interest groups or stakeholders. Example – shareholders, customers, employees, suppliers, etc. Business should, therefore, work for the interest of all of them rather than for the benefit of shareholders / owners alone.

Business is a sub-system of society. It draws support and sustenance from society in the form of inputs. Socially responsible behavior is essential to sustain this relationship between business and society.

Arguments Against Social Responsibilitly : Lack of Conceptual Clarity Dilution of Economic Goals Lack of Social Skill Burden on Consumers Responsibility without Power Over Loading Responsibility

A business enterprise is basically an economic entity and, therefore, its primary social responsibility is economic i.e., produce goods and services that society wants and sell them at a profit. There is little discretion in performing this responsibility.

Discretionary Responsibility This refers to purely voluntary obligation that an enterprise assumes, for instance, providing charitable contributions to educational institutions or helping the affected people during floods or earthquakes. It is the responsibility of the company management to safeguard the capital investment by avoiding speculative activity and undertaking only healthy business ventures which give good returns on investment

Owners are the persons who own the business. They contribute capital and bear the business risks. The primary responsibilities of business towards its owners are to Run the business efficiently. Proper utilisation of capital and other resources. Growth and appreciation of capital. Regular and fair return on capital invested.

Investors are those who provide finance by way of investment in debentures, bonds, deposits etc. Banks, financial institutions, and investing public are all included in this category. The responsibilities of business towards its investors are : Ensuring safety of their investment, b. Regular payment of interest, c. Timely repayment of principal amount.

Suppliers are businessmen who supply raw materials and other items required by manufacturers and traders. Certain suppliers, called distributors, supply finished products to the consumers. The responsibilities of business towards these suppliers are: Giving regular orders for purchase of goods. Dealing on fair terms and conditions. c. Availing reasonable credit period. d. Timely payment of dues.

The Tata Group conglomerate in India carries out various CSR projects, most of which are community improvement and poverty alleviation programs. Through self-help groups, it is engaged in women empowerment activities, income generation, rural community development, and other social welfare programs. In the field of education, the Tata Group provides scholarships and endowments for numerous institutions.

Indian automobile manufacturer Mahindra & Mahindra (M&M) established the K. C. Mahindra Education Trust in 1954, followed by Mahindra Foundation in 1969 with the purpose of promoting education. The company primarily focuses on education programs to assist economically and socially disadvantaged communities. CSR programs invest in scholarships and grants, livelihood training, healthcare for remote areas, water conservation, and disaster relief programs. M&M runs programs such as Nanhi Kali focusing on girl education, Mahindra Pride Schools for industrial training, and Lifeline Express for healthcare services in remote areas.

A business can improve its image in public by assuming social obligations. Good relations with workers, consumers and suppliers help in the success of business. Social obligations improve the confidence and faith of people in a business enterprise. So they will provide goods at reasonable price.

India has a rich cultural heritage. Businessmen who help in preserving and promoting this heritage will naturally enjoy the patronage of the society and the government. Business should, therefore, promote equality of opportunity, healthy relations with employees and customers, etc.

Large corporations have acquired tremendous social power through their multifarious operations. Social power may be misused in the absence of social responsibility. There should be a equilibrium between social power and social responsibility.

Legitimacyis in the enlightened self-interest of business to assume social responsibility. Social responsibility legitimises and promotes the economic objectives of business. By improving social life, business can obtain better customers, employees and neighbours. Social responsibility thus builds good citizenship as well as good business.

Karl Marx (1818-1883) was the founder of scientific socialism. He was a great critic of the capitalist system which was exploitative in nature and predicted that capitalism would give way to socialism.

According to Marx, “all history is a history of class struggle”. The teachings of Marx resulted in the birth of a socialist State in Russia and China. Planning which is the gift of former Soviet Russia to the world is based on socialist philosophy.

The Marginal Revolution that took place in the latter half of the 19th century is important for theory, especially the theory relating to value. Today, we speak of human development. And man is brought to the centre stage. It was Alfred Marshall who pointed out that economics was on one side a study of wealth and on the other and more important side a part of the study of man.

The institutional school is a 20th century phenomenon and it is of American origin. It emphasizes the role of institutions in economic life. The term “institutions” includes customs, social habits, laws, ways of living and modes of thinking. For example, slavery is an institution. We celebrate certain days as festivals. That is also an institution.

J.M. Keynes is considered the Father of New Economics. During the 1920s and 1930s, when the capitalist countries were affected by the Great Depression marked by bad trade and mass unemployment, Keynes suggested a greater role for government and a bold fiscal policy to tide over the crisis. The New Deal policy of America was greatly influenced by Keynesian policy. Since 1950s, economic thought has focused on growth and development.

The State plays an important role in the economic development of nations. Japan after 1870 and Soviet Russia after World War I are good examples. But the economic development of the U.K and the U.S.A took place under a system of market economy and laissez-faire policy.

According to Arthur Lewis, economic growth is conditioned by (1) economic activity, (2) increasing knowledge and (3) increasing capital. In other words, these three factors are labour, technical improvements and capital. We may add land or resources to the list.

Even in 1973, the Third World with 77 percent of the world population subsisted on only 22 per cent of the world income. Even the meagre income is maldistributed within these countries and the bulk of the population live in abject poverty. According to Meier and Baldwin, an underdeveloped country has six basic economic characteristics. They are : (1) it is primary producing ; 2) it faces population pressures ; 3) it has underdeveloped natural resources ; 4) it has an economically backward population ; 5) it is capital deficient and 6) it is foreign trade oriented.

Capital deficiency is an important characteristic of poor countries. Capital formation or investment is low in these countries. According to Ragnar Nurkse, low capital formation is one of the basic causes of poverty in these countries. Low capital formation leads to low productivity. Low productivity results in low income and low incomes result in low savings and low savings lead to low capital formation. Thus, it forms a vicious circle of poverty.

The economic backwardness of the population in the poor countries is reflected in low labour efficiency, factor immobility, lack of entrepreneurship, economic ignorance and so on. The population is ruled by customs and traditions. And people are not "economically motivated". The tax system is marked by inefficiency in collection and there is tax evasion. The Government in these countries are generally "weak, incompetent and corrupt".

Valluvar considered freedom from hunger a fundamental freedom. He was against begging. He considered industry as real wealth and labour as the greatest resource. According to Thiruvalluvar, agriculture is the most fundamental activity. He tells that the ploughmen alone live as the freemen of the soil, the rest are mere slaves that follow on their toil. (Kural 1032). For Valluvar, good ethics is good economics.

The economic ideas and policies which were followed by European governments from the 15th century until the second half of the 18th century may be described as mercantilism. The mercantilists thought that the wealth of a nation could be increased by trade. And they wanted to have more wealth by increasing the stock of gold and silver.

Democracy is being misunderstood as in terms of numbers, votes or the reflection of majority. All- inclusive representation is the new thought which is growing in the society. Democracy succeeds successfully only in the all inclusive system. In such a democratic atmosphere, the fabric of ‘plurality’ will be generated. Plural thinking and all-inclusive representations are considered as bed rock of Indian Democracy.

The Tamil Nadu state has come third after Kerala and Punjab in a health index report. The neo natal mortality rate is 14 lower than that of many other states and that the under 5 mortality has dropped from 21 in 2014 to 20 in 2015 - Healthy States, Progressive India Report, (2018) –NITI AAYOG.

Clusters may arise due to many factors. Certain clusters evolve over a long time in history when artisans settle in one locality and evolve over centuries. Handloom weaving clusters are one examples of this development. Or else, in some sectors, when a large firm is established, a cluster of firms may emerge to take care of its input and service requirements. At times, governments may decide to encourage manufacturing using raw materials from a region, which may also lead to emergence of clusters.

The final phase of industrialization is the post-reforms period since the early 1990s. The reforms made the state governments more responsible for resource mobilization and they were forced to compete with each other to attract private investments for industrialisation.

The reforms made the state governments more responsible for resource mobilisation and they were forced to compete with each other to attract private investments for industrialisation. Incentives such as cheap land, tax concessions and subsidised but quality power were all offered to woo investors. Trade liberalisation and currency devaluation also helped open up export markets. This led to two major developments.

The major industries are automobiles, auto- components, light and heavy engineering, machinery, cotton, textiles, rubber, food products, transport equipment, chemicals, and leather and leather goods. Unlike other states, the industries are spread across all regions of the state (there are 27 clusters in 13 districts) with many of them being export oriented as well. The state has a well-developed network of roads, rail, air and major ports.

Entrepreneur is an innovator of new ideas and business processes. He possesses management skills, strong team building abilities and essential leadership qualities to manage a business.

Standup India Scheme is to facilitate bank loans between `10 lakh and `1 crore to at least one Scheduled Caste (SC) or Scheduled Tribe (ST) borrower and one woman borrower per bank branch for setting up a greenfield enterprise.

MEPZ is a Special Economic Zone in Chennai. It is one of the seven export processing zones in the country set up the central government. It was established in 1984 to promote foreign direct investment, enhance foreign exchange earnings and create greater employment opportunities in the region. The MPEZ headquarters is located on GST Road in Tambaram, Chennai.

“Social Responsibility requires managers to consider whether their action is likely to promote the public good, to advance the basic beliefs of our society, to contribute to its stability, strength and harmony”. Peter F. Drucker.

Adoption of social responsibility as an objective will help to improve the public opinion of business. A good public image is a valuable asset for business. For example maintaining parks, traffic islands and organising awareness camps etc.,

If business deals with social problems, cost of doing business would increase. These costs will be passed on to consumers in the form of higher prices or will have to be borne by owners. This would lead to taxation without representation.

Acceptance of social responsibilities will involve diversion of precious managerial time and talent on social action programmes. It may result in dilution of valuable corporate resources.

When prejudice gets stronger, it develops into a stereotype. Stereotype is a false view or idea about something.

For example, girls are not good at sports. Stereotype is learned at a very early age, and children grow to have very strong ideas or opinions about things, groups or ideologies. As children grow up, the lines of like and hate for other things, people, cultures, beliefs, languages become sharper.

Now we understand that when we fix people in our image, we create a stereotype. In the above example, we have a general opinion that girls cry and boys don’t cry. When Ragu cried out of pain, others laughed at him. Gender-based stereotypes are often portrayed in films, advertisements and TV serials. Almost all the advertisements related to detergents, washing machines, dishwashers and others show a woman as the main lead or user of that product. On the other hand, all the stunts shown in a bike advertisement is performed by ferocious looking men.

Inequality means difference in treatment. The different forms of inequalities such as caste inequality, religious inequality, race inequality or gender inequality give rise to discrimination.

Discrimination can be defined as negative actions towards people. Discrimination can happen on the basis of colour, class, religion, gender etc. Treating dark-skinned people differently from fair-skinned people, giving more importance to people of higher than to those of lower caste and thinking boys are smarter than girls are all thoughts of discrimination. Article 15(1) of the Constitution states that the State shall not to discriminate against any citizen on grounds only of religion, race, caste, sex, place of birth or any of them.

After 27 years in prison, former South African President, Nelson Mandela, was freed in 1990 and succesfully achieved the end of apartheid in South Africa, bringing peace to a racially divided country and leading the fight for human rights around the world.

When India became independent in 1947, the economy of the country was very fragile and facing many problems. The level of poverty was very high. Nearly 80 percent of the population was living in rural areas, depending on agriculture for their livelihood.

In agriculture, social and economic justice was to be achieved through a process of land reforms which would empower the cultivator. In industry, the state would play an active role by setting up major industries under the public sector. These were to be achieved through a comprehensive process of planning under Five Year Plans. These strategies had been borrowed from the Soviet experience of rapid economic development.

Under the Constitution of India, agriculture was a ‘state subject’, that is, each state had to pass laws relating to land reforms individually.

Most provinces in India had enacted laws abolishing the zamindari system even before the Constitution was framed. By 1949, Uttar Pradesh, Madhya Pradesh, Bihar, Madras, Assam and Bombay had introduced suchlegislation. West Bengal, where the Permanent Settlement was first introduced, the act was passed only in 1955. Land was taken away from the zamindars were distributed among the tenants.

Zamindars in various parts of the country challenged the constitutionality of the zamindari abolition laws in court. The government then passed two amendments to the Constitution,

The two Communist states, Kerala and West Bengal, were able to push through land reforms with greater success. Reform measures in Kerala were remarkably successful, though some political compromises had to be made in a programme which started out to be completely radical.

In West Bengal, the programme to confer tenancy rights was called Operation Barga. This was quite successful, but the Communist government was criticized severely for giving official sanction to tenancy (as opposed to giving tenant farmers ownership rights to the land).

Land ceiling refers to the maximum amount of land that could be legally owned by individuals. Laws were passed after the 1950s to enforce it. In Tamil Nadu it was implemented first in 1961.

Until 1972, there was a ceiling on the extent of land that a ‘landholder’ could own. After 1972, the unit was changed to a ‘family’. This meant that the landowners could claim that each member of the family owned a part of the land which would be much less than the prescribed limit under the ceiling.

By the middle of the 1960s the scenario with regard to food production was very grim. The country was incurring enormous expenditure on importing food. Land reforms had made no impact on agricultural production. The government therefore turned to technological alternatives to develop agriculture. High Yielding Variety (HYV) of seeds of wheat and rice was adopted in 1965 in select areas well-endowed with irrigation.

Unlike traditional agriculture, cultivation of HYV seeds required a lot of water and use of tractors, chemical fertilizers and pesticides. The success of the initial experimental projects led to the large-scale adoption of HYV seeds across the country. This is generally referred to as the Green Revolution.

In 1980 a consolidated rural development programme called Integrated Rural Development Programme was introduced. The purpose was to provide rural households with assets which would improve their economic position, so that they would be able to come out of poverty. These could be improvements to the land, supply of cows or goats for dairying or help to set up small shops or other trade-related businesses.

The capital cost of the assets provided was covered by subsidies (divided equally between the Centre and the states) and loans.

The subsidy varied according to the economic situation of the family receiving assistance. For small farmers, the subsidy component was 25%, 33.3% for marginal farmers and agricultural labourers, and 50% for tribal households.

One obvious drawback was that many non-poor households were also selected as beneficiaries in the programme. Secondly, the average investment per household was not sufficient to generate additional income of about Rs.2000 per month for each household. Third, there was a question as to how many households retained the assets that had been provided, especially dairy animals. Last, and most importantly, how many households were able to move above the poverty line permanently?

In general, about 18per cent of the beneficiaries were able to cross the poverty line. There were considerable variations across different regions on all these issues. The ultimate conclusion was that the programme did not really deliver on the benefits that were intended.

The National Rural Employment Guarantee Act (subsequently renamed MGNREGA) was passed in 2005, with the aim of providing livelihood security to poor rural households. This was to be achieved by giving at least 100 days of wage employment each year to adult members of every household willing to do unskilled manual work.

The programme is implemented by Gram Panchayats. The applicants have to apply for this work and are provided with job cards. Work is to be provided by the local authorities within 15 days. If not, the applicant is entitled to an unemployment allowance. The work site should be located within 5 kilometres of the house of the applicant.

The most definitive policy statement was the Industrial Policy Resolution of 1956 which classified industries into three categories: Schedule A industries were under the monopoly of the state; Schedule B industries, the state could start new units but the private sector could also set up or expand their units; Schedule C were the remaining industries.

There were only 5 public sector enterprises in India in 1951. By 2012, this number had increased to 225. The capital investment increased from Rs.29 crores in 1951 to 7.3 lakh crores in 2012.

In the 1950s, the private sector did not have the resources or the willingness to enter into such investment. Steel plants in Bhilai, Rourkela, Durgapur and Bokaro, engineering plants like Bharat Heavy Electricals and Hindustan Machine Tools were all set up in the 1950s in collaboration with Britain, Germany and Russia which provided the technical support.

The Indian government under Prime Minister P.V. Narasimha Rao finally announced a shift in its industrial policy to remove controls and licences, moving to a liberalized economy permitting a much larger role to the private sector.

The Planning Commission was set up in 1950 to formulate plans for developing the economy. Each Plan assesses the performance of the economy and the resources available for future development.

The First Five Year Plan covered the period 1951–56. Till now there have been twelve Five Year Plans in addition to three one year plans between 1966 and 1969.

The First Plan (1951–56) focused on developing agriculture, especially increasing agricultural production. The allocation for Agriculture and Irrigation accounted for 31% of the total outlay. After this, the emphasis shifted to industry, and the share of agriculture in total outlay hovered between 20 and 24%. By the Eleventh Plan it had come down to less than 20%.

The Second Plan (1956–61), commonly referred to as the Mahalanobis Plan, stressed the development of heavy industry for achieving economic growth.

The share of industry in Plan outlay was only 6% in the First Plan, and increased to about 24% after the Second Plan.

Twelve five year plans have been made between 1951 and 2017. Twelfth Five Year Plan (2012-2017) was the last plan. In 2015, the Planning Commission was wound up and replaced by the NitiAyog.

The Tata Institute of Fundamental Research (TIFR) was set up in 1945 on the initiative of Homi J. Bhabha, with some funding from the Tatas. It was intended to promote research in mathematics and pure sciences.

Agricultural universities are also actively engaged in teaching and research on agricultural practices. There are 67 Agricultural Universities in India, and 3 in Tamil Nadu.

Three systems of revenue collection had been introduced by the British. They are Permanent settlement, ryotwari, Mahalwari.

No contractors are to be involved in MGNREGA. This is to avoid the profits which will be taken by the middlemen thus cutting into the wages. The ratio of wages to capital investment should be 60:40.

(Mahatma Gandhi) National Rural Employment Guarantee (MGNREGA) One-third of the workers would be women. Men and women would be paid the same wage.

Integrated Rural Development Programme (IRDP)was restructured in 1999 as a programme to promote self-employment of the rural poor.

Efforts like Bhoodan started by Vinoba Bhave to persuade large landowners to surrender their surplus land voluntarily attracted much public attention.

Indian Institutes of Technology (IITs) were set up as centres of excellence in different fields of engineering. The first IIT was located in Kharagpur, followed by Delhi, Bombay, Kanpur and Madras (Chennai).

The Council of Scientific and Industrial Research (CSIR) is the umbrella organization under which most of the scientific research institutions function. The CSIR also advances research in applied fields like machinery, drugs, planes etc.

India has made great strides in developing institutions of scientific research and technology. The only science research institute in India before Independence was the Indian Institute of Science (IISc) established in 1909 in Bangalore with funding from J.R.D. Tata and the Maharaja of Mysore.

Literacy levels have increased in India from 18.3% in 1951 to 74% in 2011. Female literacy still lags behind the male literacy rate at 65% as compared to 82% among men.

The economy was liberalized during the Eighth Five Year Plan (1992–97). Since then, the growth rates have been in excess of 7% (except for a slowdown in the Ninth Plan).There has been considerable emphasis on growth with justice, and inclusive and sustainable growth.

From the Fourth Plan (1969–74) the emphasis was on poverty alleviation, so that social objectives were introduced into the planning exercise. The targeted growth rates were reached from the Sixth Plan onwards.

In Bengal and most of north India, the Permanent Settlement placed the responsibility of paying land revenue on the rentier class of zamindars.

In south India, the cultivators paid the land revenue demand directly to the government under the system known as ‘ryotwari’ (‘ryot’ means cultivator).

In fact, the industry sector only accounted for 13% of the total Gross Domestic Product (GDP) in 1950.

Tenancy reform legislation was aimed at achieving three ends: (i) to regulate the rent; (ii) to secure the rights of the tenant; (iii) to confer ownership rights on the tenants by expropriating the land of the land owners.

Economic development can be achieved in many ways. One option would be to follow the free enterprise, capitalist path; the other was to follow the socialist path. India chose the latter.

The First Amendment in 1951 and the Fourth Amendment in 1955, which removed the ‘right to property’ from the fundamental rights guaranteed under the Constitution and pre-empted the right of zamindars to question the expropriation of their land or the value of the compensation.

The increase in wheat production was even more impressive, from 11 million tones in 1960–61 to 94 million in 2011–12.

Total rice production increased from 35 million tonnes in 1960–61 to 104 million tonnes in 2011–12.

Between 2006 and 2012, around Rs.1,10, 000 crores had been distributed directly as wage payment under the MGNREGA programme, generating 1200 crore person-days of employment.