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Mukesh Gulati and Ruchita Sanwal

Micro, small and medium enterprises (MSMEs) have a pivotal role in the socio-economic development of India owing to their vast number and their employment generation potential. However, most of the enterprises are typically small and unregistered. Provision of social security through legal measures is limited due to weak enforcement of regulatory policies and entrepreneurial attitudes. A development project funded by the European Union, ‘Scaling up sustainable development of MSME clusters in India’ (2012–16), undertaken by the Foundation for MSME Clusters (FMC) in partnership with various institutions to promote energy efficient measures in foundry clusters in the states of Punjab, Rajasthan and West Bengal, significantly benefited the foundries economically. As a result of the project, the enterprises were more receptive to the otherwise perceived non-business cases of social issues. Occupational health and safety (OHS) and labour welfare were targeted as part of the corporate social responsibility (CSR) activities adopted in the project. This chapter draws on the lessons learned during this project to highlight key factors that can trigger adoption and scaling up of CSR activities among MSMEs. The chapter demonstrates that entrepreneurs’ lack of awareness about the potential business case arguments for CSR activities is the first hurdle. Second, the role of local industry leaders and business membership organisations is crucial in establishing a business case among industry. Lastly, ensuring continuity of interventions through cost reduction by standardisation of such activities, local institutionalisation, and linking up with other funding options in industrial clusters, is important for scaling up such interventions.