The government of India’s data presented in the Rajya Sabha earlier this year revealed that companies have spent only INR 8 crore in Nagaland as part of corporate social responsibility (CSR) over the last seven years. It accounts for only about 0.006% out of the total INR 1.25 lakh crore spent in the country during the same period. This disparity in distribution of CSR projects triggered a discussion with some lawmakers suggesting that the Centre makes it mandatory for firms to spend more funds in less developed areas of the country. However, the Centre had made it clear that it can’t decide on how companies spend their CSR funds though the public sector undertakings have been asked to spend 60% of its CSR funds in Aspirational districts. The fact is that private firms have the tendency to spend its share of funds in areas that they are located in. So, the states that are home to more firms get more funds under CSR and the rest gets less. No wonder states like Nagaland and its counterparts in the Northeast get only the spillover. However much we want more of such funds to flow into less developed areas like the Northeast, it will be inappropriate for the Centre to dictate the companies on where and how to spend its own money though suggestions and requests can be given. It is also natural for firms to consider its business interests and public relations for every penny spent but it won’t lose by helping the deserving states and communities. Channeling CSR funds in sectors like health, education and sports in the northeastern region will pay great dividends.
The meager inflow of CSR grants into the Northeast also indicates that corporations have grossly underestimated the market in the region. This calls for the need to clear the possible misconceptions among business leaders because of insurgency in the region and other limiting factors. Considering the impact every investment can have on a state’s economy and the job market, the ongoing Nagaland Corporate Social Responsibility (CSR) and Investment Conclave 2022 is a welcome move towards bringing vital projects to the state by partnering with socially conscious corporations. The presence of Union Finance Minister Nirmala Sitharaman at the event should greatly aid in convincing companies, both domestic and international to invest in the state. Having said that, several factors like availability of skilled workers, support from the government and community, low cost of living, good infrastructure such as roads, railways, power, telecom services, airports, etc. determine the flow of investment activities. The role of angel investors and government in creating entrepreneurial and startup ecosystem is also vital. A look at how India’s top two technology hubs -- Bengaluru and Hyderabad – have evolved over the years informs us that it takes time to convince big firms to invest but they will one day if provided a right ecosystem. What the government of Nagaland has embarked on is towards creating that ecosystem, garnering courage from improved law and order situation in the state since the signing of ceasefire with several insurgency groups more than two decades ago. The state has taken the first steps towards economic viability and we have much further to go.