Abstract The Companies Act 2013 has been a stimulus in jumpstartingthe contribution by the corporate world towards social impact through CorporateSocial Responsibility. Businesses are taking a strategic yet targeted approachtowards improving the education sector. They have been pushed to a responsiblerole in the society and have a targeted vision in their corporate socialresponsibility programs wanting to impact areas that have a correlation withtheir own business goals.
For many businesses, education is an important partof their plans, since the needs exist in all geographic areas, across allsubject areas, and for all kinds of people. Though there are many private aswell as non-governmental organizations working towards the same cause, thebackbone of the education system in India still remains with the municipalschools who in fact reach out to the maximum children in need. This researchpaper is conducted to assess the impact of CSR funds on municipal schooleducation in India both quantitatively as well as qualitatively. Introduction Corporate Social Responsibility – courtesy the CompaniesAct, 2013 has the ability to catalyze the movement desperately needed for theimprovement of India’s school education system. One of the 10 approved areasfor CSR initiatives under the Schedule VII of the Act is “promoting education,including special education and employment enhancing vocational skills,especially among children, women, elderly, and the differently abled andlivelihood enhancement projects”. Even the UN under its Sustainable Goals initiativehas focused on Education as it’s 4th most priority. The Municipal School System in India makes up for about 65%of the schools providing education to approximately 259 million students,employment to almost 57 million employees as teachers, headmasters andadministrative staff. Though it makes up for the backbone of the community, itstill lacks in creating the impact due to insufficient funds, lack of planning,poor administration and lax execution.
With the implementation of the Companies Act 2013, companiesare required to spend 2% of their average net profit over the three precedingyears on CSR which can go a long way in bridging the gap between and contributeto creating an India which houses an excellent as well as an inclusiveeducation system. An increasing number of NGOs, Private Organizations,Foundations and Companies collectively work towards bridging the gap found inthe municipal school education. But, deeper assessment has showcased a drop inretention rates with more than 47 million children dropping out of before theage of 15 according to the 2016 UNESCO Report.
Not only that, 1 in 3 studentsin The Impact of Corporate Social Responsibility on Municipal School Educationin India 4 municipal schools are malnourished while as more than 71 millionstudents turned to private tuitions to even be able to do basic arithmetic. Inaddition, despite spending Rs. 586,085 crore ($94 billion) over the last decadeon primary education, India has been unable to arrest the decline in learning.
As the backbone of the education sector in India, MunicipalSchools have to focus on the development of its own module, teaching style,impact assessments, infrastructure facilities and so on. The finance ministeroutlaid a Rs. 79 crore budget for the education sector for 2017-18.
With the9.9% increase in government funding as well as a 20% increase in CSR funding,the education sector has to gear towards an increase in its overall impact onstudents in terms of enrollment, retention and pass rates. It should also aimto increase its HDI-Education Index and be able to cater world class educationaffordable by the majority of the Indian population.
The municipal education system is also heavily bogged downby bureaucracy which shadows the efforts of many able teachers, headmasters andschools as a whole. There is little to no transparency regardingimplementation, execution and evaluation of various initiatives, funded by boththe government and other third-party organizations. There is also no account ofstudent progress from the time he/she has joined the system which in turn doesnot allow for a thorough examination of the impact of the school educationsystem as well. Objectivesof the Study 1.
To study the impact of funds that come in as CSR on thequality of the education in municipal schools 2. To study the difference created by the plans and schemes startedby Companies involved in Municipal School Education 3. To study the impact by NGOs in Municipal School Education4. To study the pillars involved to establish a relationshipbetween municipal schools and other non-governmental organizations and/orcompanies. 5. To study the development in children through CSR projectsin Municipal School Education LiteratureReview Education was and still remains to be one of the mostfavored sectors for contributions by major companies under the Corporate SocialResponsibility charter. Even before the mandatory Companies Act, 2013, theeducation sector has always attracted funds from major powerhouses The Impact of Corporate Social Responsibilityon Municipal School Education in India 7 and continues to do so.
Although therehas been a significant increase in funds, the relative impact has not beenobserved. The HDI – Education Index for India was 0.356 in 1980.
Fastforward to 2000, it increased to 0.472 and 0.617 in 2010 respectively. In 2013.The index was clocked at 0.
65. India ranks 92 in comparison to the othercountries of the world, coming behind countries like Philippines, Malaysia, SriLanka and many more as per the Legatum Prosperity Index 2015. According to the EFAGlobal Monitoring Report 2010 (UNESCO), India ranks 105 amongst 128, fighting alongsideAfrican countries as well as Asian countries such as Bangladesh and Pakistan.The country supports a male literacy rate of 82.14% and a female literacy rateof 65.46% according to Census 2011.
The latest Annual Status of Education Report published inJanuary 2017 states a disappointing scenario with poor overall learning levelsin municipal schools across the nation. This in itself is a surprising find asthe investment in CSR initiatives has been on the rise.In FY16, education received the highest amount of CSRfunding amongst all other social development activities allowed under the CSRagenda.
Approximately 920 National Stock Exchange-listed companies togetherhave spent close to Rs.2042 crore on education which is a huge increase whencompared to Rs.1570 crore invested in FY15 as reported by Prime Database. CSR Rules require companies with a net worth of Rs 500 croreand above or revenue of Rs1,000 crore and above or net profit of Rs5 crore andabove to spend 2% of their average net profit of the last three years on socialdevelopment, including sanitation, education and healthcare. The Impact ofCorporate Social Responsibility on Municipal School Education in India 8An in-depth study of the annual reports reveal that the CSR fundsclassified for the use of education is not exclusively being utilized for thesame cause. Many companies are using the funds to construct toilets under theSwachh Bharat mission or provide infrastructure support.
Much of the funds isalso being utilized for non-academic activities or for activities grouped under’promoting education’.Education is favored because it touches on various aspectsof many social problems as education has a considerable impact on standards ofliving and the job opportunities that it opens up. But if the CSR funds are notbeing used to improve the quality of education, then the purpose is lost.The Michael and Susan Dell Foundation believes that the supportof firms should go beyond tuitions, books and building school infrastructure.
The firms should look into supporting organizations and municipal schools whichhave clear learning outcome target which in turn is also easily measurable. Theannual report of ABB Ltd indicates that out of Rs 1.70 crore it spent on CSR inthe past fiscal year, Rs 78 lakh was allocated for ‘promoting education’.The company has included activities such as purchase of shoesworth Rs 43,000 for school children at Nashik Govardhan School in Maharashtra,and building infrastructure and water proofing work at schools. The company hasalso spent close to Rs.
64 lakhs on providing prefabricated toilets to 42schools in Bihar. Similarly, Bharat Electronics Ltd over Rs 2.5 crore of itsCSR funds for the construction of classrooms and infrastructure facilitymaintenance in educational institutions in Karnataka and almost Rs. 3.7 crore forbuilding toilets in schools across the state in FY16. The Impact of CorporateSocial Responsibility on Municipal School Education in India 9Though these investments by the aforementioned companies aretowards essential facilities for the students, they do little to contributetowards learning outcomes.
The government has already started working towardsthese issues under its Swachh Vidyalaya mission which only means that extrafunds need not go towards the same. Because companies have been categorizingthese investments as ‘promoting education’ there has been a high jump in CSRfunding which explains the gap between increase in funding and no relativeimpact in the education sector.With an increasing number of NGOs and private organizationsworking in the education sector, impact has not been able to be assessedconsistently.
The organizations are not able to work hand-in-hand with themunicipal schools which leads to a lot of discrepancies and leads to the ultimateloss of learning borne by the students. An increased number of investments by companiesdirectly into NGOs or private organizations is not consistently tracked whichalso leads to the aforementioned gap in the education sector. Even if directinvestments are catered into the municipal school system, there is noconsistent record of its utilization and ultimately the impact so created.
Findings ofthe Study 1. The government does not maintain any public record forthe amount of funds that are invested by companies in their CSR initiatives whichmakes it difficult to keep a track of the money and assess its impact.2.
There is also no public record maintained by themunicipal schools of the funds that have been invested by NGOs and otherorganizations in these schools.3. It was found that either 2 or mostly no NGOs or otherprivate organizations work with a school, thus pointing out the fact that themunicipal schools are way more in number. 4.
The overall development, is very restrictive and notextensive, of the children.5. It is preferred by the schools to work directly with thecompanies as this grants them much more autonomy, transparency and judicial useof funds.6. The Municipal Corporation’s CSR wing or other CSRinitiatives do not provide the schools enough funds.7.
It is preferred by the schools to receive direct investmentfrom companies in the form of funds rather than cash.8. Majorly the funds inested in CSR by companies are usedfor ‘Promoting Education’ and not towards actual learning.9.
There is no real-time assessment of the CSR initiativesand their impact on the students either by the companies or by the government Recommendations1. The Municipal Corporations should cooperate with the stateto create a transparent process for funds to be invested by companies eitherdirectly or indirectly through various Non-Government Organizations for thedevelopment of the children. 2. An autonomous body or committee should be established bythe government to assess the CSR initiatives undertaken and the quality ofthese initiatives.3.
The faculty of the Municipal schools including theHeadmasters and/or the teachers should play a vital role in the planning,creation and execution of the CSR initiatives undertaken.4. The primary focus should be on investing in the actuallearning process instead of activities to promote education.5.
The Municipal schools should have a say in major decisionstaken by the Municipal Corporations for the greater good.6. The Municipal schools should come up with an effective andreliable system to assess the students in a collaborative effort with theMunicipal Corporations and the government to measure the difference made by theinitiatives implemented. 7.
The government should introduce consistent assessments toevaluate the effectiveness of various CSR initiatives to utilize fundsefficiently.