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me 1, Number 2, July - Aug (2010), IAEME ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), pp. 129-140 IAEME IAEME, http://www.iaeme.com/ijm.html
IJM
ABSTRACT:
Neyveli Lignite Corporation Limited a Central Public Sector operating in the backward region of Tamilnadu, has been aggressively pursuing Corporate Social Responsibility since its inception in 1956. What impact its social development initiatives had made on sustainable development in this region was not evidently ascertained for long. The study on Social Sector Activities of Neyveli Lignite Corporation compiled, collated data on NLCs spending on social infrastructure development in the project area and its spending on promotion of education and health in this region. The study also measured the Human Development Index for this region as an outcome of sustained CSR initiatives taken by this company for over 50 years. Assessment of life expectancy, adult literacy and per capita GDP for this region indicated a higher Human Development Index (HDI) of 0.81 which is higher compared to 0.531 achieved for the state. This finding conclusively portrait the significant contributions made by Neyveli Lignite Corporation towards Human development in this backward region through aggressive CSR strategies.
INTRODUCTION
The concept of social responsibility of Business popularly termed Corporate Social Responsibility is by no means a recent phenomenon but many observers agree that the globalization has spurred its growth and prominence. Aaronson argues, Europe has taken the lead in shaping global CSR debates1.The term CSR includes environmental, social , and human-rights based impacts and initiatives of companies, Ward and Fox 129
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
elucidate 2, and many countries in both industrialized and the third world take the concept and practices seriously, explains Hopkins3. The definition of CSR, therefore, is still being debated and there is no consensus among academicians or practitioners, Mohan observes
4
. Ward and Fox 5argue, whatever the language used, the basic idea is to understand
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
STUDY METHOD
Comprehensive data on the social sector activities of NLC was collected from the various departments like CSR division, Hospital Care Delivery System and Education studying secondary sources like records, reports and registers maintained by the respective CSR areas and financial data by referring the Annual Report of the Hospital and Township administration for social overheads. The information/data sought for pertained to NLCs spending on social sector, community development projects, utilization of medical care service by rural population in the last 5 years, enrolment of rural children in NLC run schools and the overall impact of such development initiatives on the quality of life of the local population. Secondary data available in the Annual report of the company was also accessed to make analysis of NLCs commitment towards social development initiatives.
OBJECTIVES
To evaluate NLCs spending on social sector which cover areas like provision of Housing, lighting, water supply, health, education, development of sports, recreational facilities like library, wellness centres, clubs, parks, gardens, roads, water supply, public health measures, public sanitation, roads, transport that have huge bearing on the quality of life of employees and their dependants and other general population. To analyse NLCs overall spending on Community Development activities as percentage of net profit in the last 5 years from 2004-05 to 2008-09. To assess utilization of medical services by rural population in the last 5 years from 2004-05 to 2008-09. To compute the Human Development Index( HDI) for this region as a measure of impact which NLC created on the overall social development of this region
Hypothesis
H0 : Human Development Index for Neyveli and the surrounding rural area is not in the high HDI category H1: Human Development Index for Neyveli and the surrounding rural area is in the high HDI category
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
Statistical Analysis
Spending as percentage of net profit was calculated to verify if spending on social development, community development, health initiatives and education was on sustained basis over the last 5 years. A five year analysis of Percentage of pass achieved by rural students who appeared for the 10th and 12th Standard public examinations was analysed to examine the success rate of NLC run schools in promoting higher secondary level education in this rural area. Impact of NLCs spending on community development, health and education was measured in terms of Human Development Index for Neyveli to infer if Neyveli was better off compared to the State of Tamilnadu.
1 5 9 3 3 3 59 6 21 1
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
Analyzing the above data it could be inferred that Neyveli Lignite Corporation which had created 30 development infrastructure in the Township and sustain the facilities through maintenance had contributed significantly for improving the quality of life of people residing in this region through provision of holistic environment that meet out Housing, health, educational, recreational, social and spiritual needs of employee community and other general public. The study further revealed the provision of subsidized housing, water and electricity, public health, sanitation, drainage, lighting, gardens, lawns, recreational facilities, solid waste management system and free medical care services which the residing population in this Township enjoy, could lead to enhancement of their quality of life to a great extent. The following data dwelt on NLCs spending on development of a model Township with all amenities and infrastructure facilities that promote human development in this Neyveli and surrounding villages. Table 2 NLCs spending on Social Development (Rs.in Crore) Spending on Township social sector Year Library Transport maintenance as % of Net profit 2004-05 36.98 0.51 7.84 6.26 2005-06 38.20 0.55 8.72 11.57 2006-07 42.19 0.62 9.57 15.12 2007-08 49.44 0.80 11.21 9.89 2008-09 84.53 0.98 12.52 20.15 Average 12.59 The above analysis revealed that NLC had spent an average of 13 % of its net Medical Net profit care expenditure Rs. In Cr. Rs. In Cr. 30.78 1215.00 33.86 702.35 33.36 566.75 47.52 1101.57 67.37 821.09 profit on maintenance of Township which is spread over 50 sq.kilometer with 30 residential blocks that house 21,029 residential quarters provided to around 19,000 NLC regular employees and another around CISF personnel, which was significant finding. The Township is home for around 3.0 population which include contract workmen and general public who consist of businessmen, Bank/Insurance personnel and other Government personnel who render commercial services to NLC project. It could be concluded that the standard of living of employee population, their families, contract
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
workmen and their families and the surrounding population who have access to quality housing, sanitation, public hygiene, drinking water, electricity , road, medical care, education, sports facilities, wellness centres, recreation, pollution free environment ensured by green belt which serve as pollution sink would be higher plane as impacted by sustainable social development initiatives of Neyveli Lignite Corporation.
NLC on an average had spent 0.38 percent of its income towards development of key infrastructure like school building, laboratories, libraries, Primary health centres, Reproductive and child health centres, irrigation canals, check dams, desilting of tanks 134
International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
roads, bore wells, and overhead tanks for improving accessibility to safe drinking water which were considered catalyst for determining growth sustainability in the surrounding villages. NLC in the last 5 years had helped peripheral villages achieve sustainability in education through augmentation of facilities like libraries, laboratories, computer labs, Toilet and drinking water facilities in schools located in the local area where it operates. Development of such facilities aided in upgrading the existing schools so that rural children could gain access to education up to high school level in their own environment. Health Infrastructure provided by NLC in the peripheral villages included renovation of Primary Health Centres by which NLC had complemented the efforts of State Government in meeting Millennium Development Goal of Health for All in the rural areas. NLC had developed adequate irrigation infrastructure like canal for continuous irrigation of 23,000 hectares of land for sustaining perennial crops in this region. The impact of sustained irrigation could be seen in raising of 3 major crops per annum on continuous basis as against 1 or 2 two crops which farmers in other areas could hope to raise in the absence of continuous irrigation. Analysed in this perspective, it could be concluded that NLC had contributed to improving percapita GDP agriculture product leading to sustainable livelihood in this region. Building access roads which NLC focused on priority basis had facilitated access of the surrounding rural population to Neyveli- the centre of development in this region and facilities available in it like Hospital, Schools, sports facilities, libraries, rehabilitation and other recreational facilities. The improved accessibility to the NLC Township enable the surrounding rural population to engage in street vending through sale of milk, fish, poultry, meat, vegetables, petty business, small trades like motor mechanic, cycle repair and merchandise in local agriculture produce like cashew nuts, jack fruits that improve their livelihood sustenance to a significant level.
COMMITMENT TO HEALTH INITIATIVES FOR IMPROVING QUALITY OF LIFE OF SURROUNDING RURAL POPULATION
NLCs spending on provision of health care for the rural population as sourced from secondary data available from the company run hospital reveal that it had treated
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
more than a lakh of rural patients in its 369 bed facility. Analysis of data on utilization by rural population of health care services provided by NLC explain the major role played by the company in providing medical care to the rural population: The following table analyses the utilization of medical care service by rural population in NLC GH in lakhs and percentage share in total medical expenditure for the period from 2004-05 to 2008-09. Table 4 NLCs spending on community health initiatives and medical care to rural population Utilization of medical service Amount spent on rural Spending as % Year Income in Cr. population in Cr. of net profit by rural patients ( in lakhs) 2004-05 1.30 0.24 1215.00 0.02 2005-06 1.19 0.28 702.35 0.03 2006-07 1.37 0.37 566.75 0.06 2007-08 1.38 0.43 1101.57 0.04 2008-09 1.42 0.51 821.09 0.06 Average 1.33 0.37 0.04 Analysing the above data it could be concluded that NLC had spent an average of 0.04 % of its total income towards providing medical care to the surrounding rural population in the service areas of emergency, Out-patient, Maternity and Family welfare.
COMMITMENT
TO
EDUCATIONAL
INITIATIVES
FOR
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International Journal of Management (IJM), ISSN 0976 6502(Print), ISSN 0976 6510(Online) Volume 1, Number 2, July - Aug (2010), IAEME
Analysis of enrolment of rural children in NLC run schools and the amount spent by NLC as percentage of its net profit on development of school facilities which rural children predominantly make use of support the above hypothesis. Table 5 NLCs spending on education (Rs.in Crore) Annual Annual spending Income Spending as Year Enrolment spending on on sports and in Cr. % of GDP education culture 2004-05 10500 3.41 0.91 1215.00 0.35 2005-06 10352 3.39 0.75 702.35 0.58 2006-07 10111 3.64 0.83 566.75 0.78 2007-08 10090 3.15 0.88 1101.57 0.36 2008-09 8774 5.40 0.11 821.09 0.67 Average 0.37 0.54 The above analysis revealed that Neyveli Lignite Corporation in the last 5 years had spent an average of 0.54 percent of its net profit on provision of education, sports and culture which rural children predominantly utilize. The percentage of pass which NLC run schools had registered for Higher Secondary and High level education in the last 5 years further strengthened the hypothesis that the mean schooling year for this backward region to be upward of 12 years. Table 6 Percentage of pass for 10th and 12th standard rural children studying in NLC run schools 12th Standard 10th Standard No.of No.of No.of No.of Year students students % of pass students students % of pass appeared passed appeared passed 2005-06 1154 788 67 1446 1067 74 2006-07 1252 885 67 1408 982 70 2007-08 1244 845 68 1365 998 74 2008-09 1164 882 72 1501 1110 74 2009-10 1141 919 77 1421 1082 76 Analysing the above data it could be concluded that Neyveli Lignite Corporation had made significant improvements in terms of churning out no.of students who had successfully passed both 12th and 10th standard public examinations in the last 5 years. By achieving an improved performance in education from 67 percent pass registered during 2005-06 to 77 percent during 2009-10 in the case of 12th standard and 74 percent during 2005-06 to 76 percent achieved during 2009-10 in the case of 10th standard public 137
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examination, NLC run schools which predominantly serve the surrounding rural population had contributed to promotion of higher secondary level school education among the rural population and in turn impacted their quality of life.
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Life expectancy index = 75 25 / 85-25 = 0.833 Adult literacy rate: 0 percent and 100 percent Adult Literacy rate for Neyveli is 90 % Adult Literacy Index = 90 0 / 100-0 = 0.90 Combined gross enrolment ratio= 0 percent and 100 percent Combined gross enrolment ratio for Neyveli is 100 % Combined gross enrolment index= 100-0/100-0 = 1.00 Educational attainment for Neyveli = [ 2( 0.90) + 1(1.00) ]/3= 0.93 Real GDP percapita ( PPP$) = $ 100 and $ 40,000 GDP per capita for Neyveli is 5333 $ GDP per capita ( PPP$) for Neyveli is Log ( 6793) log ( 100) / log ( 40000) log ( 100) = 0.70 Human Development Index for Neyveli is 0.833 + 0.90 + 0.70 = 0.81 Neyvelis HDI of 0.81 when compared to the state HDI of 0.531 and the countrys HDI of 0.472 is bracketed in high HDI category.
CONCLUSION
Neyveli Lignite Corporation, which embedded in its vision the Corporate Social Responsibility objectives, had contributed significantly to the Human development of this region by spending 13 % of its net profit on development of social infrastructure like housing, health, medical care, drinking water, electricity, education, sanitation, public hygiene, roads, recreation , sports and worship centers that promote religious harmony. The company had also spent 0.04 % and 0.54 % of its net profit for provision of medical care and education respectively to the surrounding rural population. The higher HDI of 0.81 achieved by NLC for this region compared to 0.531 of Tamilnadu reveal the companys consistent efforts towards achieving the goal of sustainable development by fully realizing its CSR vision and mission.
REFERENCES
1. Aaronson, S.A. (2002) How the Europeans Got a Head Start on Politics to Promote Global Corporate Social Responsibility, PP.356-367, International Journal Corporate Sustainability. Corporate Environmental Strategy,
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9(4).Elsevier
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Inc.Ruth
Hillary,
Editor-in-Chief,
Scott
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Kirkpatrick & Co Ltd., London UK. 2. Ward, H and T.Fox (2002) Moving the Corporate Citizenship Agenda to South, London: IIED. 3. Hopkins, M (2003) The Planetary Bargain: Corporate Social Responsibility comes of age, London: Macmillan Press. 4. Mohan .A (2001) Corporate Citizenship: Perspectives from India, Journal of Corporate Citizenship, Sheffield: Greenleaf Publishing. 5. Ward, H and T.Fox (2002) Moving the Corporate Citizenship Agenda to South, London: IIED.
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