India
Source: infobrics.org

China welcomed the support extended by the BRICS countries in its efforts to combat the deadly coronavirus epidemic that has brought the country to a virtual standstill, describing it as an epitome of the support Beijing has received from the international community.

The death toll in China's novel coronavirus outbreak has gone up to 1,113 with 97 new fatalities reported mostly in the worst-affected Hubei province while the confirmed cases of infection jumped to 44,653, health officials said.

Russia, the current chairman of the BRICS (Brazil, Russia, India, China, South Africa) issued a statement extending support of the BRICS group to the firm commitment and decisive efforts of the Chinese government to combat the novel coronavirus pneumonia epidemic.

"The BRICS countries are ready to cooperate closely with China and call for the international community to strengthen cooperation within the framework of the World Health Organisation in order to prevent, protect and control regional and global public health safety, providing a coordinated public health response to the epidemic outbreak," state-run Xinhua news agency quoted a statement from BRICS Chairman Russia as saying.

"The BRICS countries commit to work together in a spirit of responsibility, solidarity and cooperation to bring this outbreak under control as fast as possible. They underline the importance of avoiding discrimination, stigma and overreaction while responding to the outbreak," it said.

In the statement, Russia also said that they support strengthening of scientific research cooperation on infectious diseases that pose threat to public health," it added.

China welcomed the move, saying the statement delivers positive and constructive messages.

"They are also important partners for China. This statement delivers positive and constructive messages, voices support for China's efforts and calls for greater international cooperation in safeguarding public health security," Geng Shuang, the spokesperson of China's Foreign Ministry, said in an online media briefing.

"At this critical stage, the statement demonstrates the BRICS spirit of helping each other during difficult times. It is also an epitome of the support China has received from the international community. We highly appreciate it," he said.

"We will continue to work with the international community including the BRICS countries to combat the epidemic and safeguard regional and global public health security," he said.

Russia
Source: infobrics.org

The meeting of the BRICS anti-terror working group will be held in Russia in April, Vladimir Tarabrin, the head of the Russian Foreign Ministry's Department for New Challenges and Threats, told Sputnik.

"Within the framework of BRICS, a meeting of the working group will be held under the Russian chairmanship. We intend to hold it in April to thoroughly exchange views on the whole range of issues of anti-terrorism cooperation," Tarabrin said.

He noted that Russia's cooperation in the anti-terrorism area was most developed with the CIS countries and the Collective Security Treaty Organization (CSTO) member states, with which Moscow has an extensive system of bilateral cooperation on anti-terrorism, as well as with BRICS.

Tarabrin took part in the high-level international regional conference Foreign Terrorist Fighters: Addressing Current Challenges, held at the Organization for Security and Co-operation in Europe headquarters in Vienna.

Brazil
Source: www.postwesternworld.com

The transformation of the BRIC acronym from an investment term into a household name of international politics and into a semi-institutionalized political outfit (called BRICS, with a capital 'S'), is one of the defining developments in international politics in the past decades. While the concept is now commonly used in the general public debate and international media, there has not yet been a comprehensive and scholarly analysis of the history of the BRICS term. The BRICS and the Future of Global Order, Second Edition offers a definitive reference history of the BRICS as a term and as an institution—a chronological narrative and analytical account of the BRICS concept from its inception in 2001 to the political grouping it is today. In addition, it analyzes what the rise of powers like Brazil, Russia, India, China, and South Africa means for the future of global order. Will the BRICS countries seek to establish a parallel system with its own distinctive set of rules, institutions, and currencies of power, rejecting key tenets of liberal internationalism, are will they seek to embrace the rules and norms that define today's Western-led order?

Russia
Author: Yana Grigoryeva
Source: infobrics.org

Yana Grigoryeva, Intern at the Russian National Committee on BRICS Research - special for InfoBRICS

In modern world the main role for the economic security of BRICS members - Brazil, Russia, India, China and South Africa - is played by energy issues and energy cooperation as the tools of keeping energy security. Promoting and strengthening external contacts is one of the key areas for implementing the energy policy of each of the group's countries, which is directly reflected in their energy strategies. During almost the entire period of BRICS, cooperation in this area has been implemented mainly through the development of already formed bilateral trade and investment ties. The most striking and historically proven examples are the Russia - China energy dialogue or the large-scale Russian-Indian joint project to build the "Kudankulam" nuclear power plant.

From the practical multilateral energy cooperation point of view, the significant event was VII BRICS summit in Ufa, that led to the agreement to hold the first meeting of BRICS energy Ministers at the end of 2015. Countries were ready to implement joint developments in the field of energy-efficient technologies and equipment at the enterprise level, as well as to conduct a further analysis of the ways to establish cooperation in this area by the BRICS Business Council. Next year, the action plan for the implementation of the Goa Declaration already included a meeting of the BRICS Working group on energy saving and improving energy efficiency.

In 2017, at the BRICS Summit in Xiamen, the Russian side put forward an initiative to create an energy research Platform to carry out information, analytical and research work in the field of energy development and the subsequent development of a coordinated energy policy and strategy of the participating countries. A year later, during the meeting of BRICS Ministers of Energy in Johannesburg, there was made the official decision to launch this IT Platform.

The nature of BRICs multilateral energy cooperation remains ambiguous due to the number of existing internal differences. Common features include geographical location, such as the remoteness of Brazil and South Africa from other members of the Association; different socio-economic and legal development models; unresolved issues on the bilateral agenda; the risk of declining interest in cooperation and reorientation to other major regional projects.

The group of factors that impede multilateral energy cooperation of the BRICS countries can include:

1. Position in the global energy system. Understanding the strategic objectives of the country's energy security defines its approach to building domestic and foreign energy policy, but, above all, to determining the principles on which it is based. In this regard, energy exporters and importers have different interests. In the case of BRICS, this prevents building a multilateral system of interaction in the field of energy within the group.

2. Intra-group competition. Potential contradictions in the spheres of influence on the energy market within the BRICS framework exist with respect to major importing countries in the Asian region, such as India and China. For example, China, being the world's largest consumer of energy resources, has stable supplies of hydrocarbons from Central Asia, Central and South America. India, which ranks fourth in the world in terms of consumption of oil and petroleum products, as well as being a major importer of gas, pursues a policy of market diversification and implements its interests through participation in joint projects in South America, Africa and the Caspian Sea.

3. Established ties with third countries. Currently, the largest suppliers of energy resources to the BRICS countries and consumers of these countries' resources are geographically located outside of the Association.

4. Alternative integration processes. Before the formation of the BRICS, the group's countries were already participating in international formats whose activities affected the energy sector.

The road map for trade, economic and investment cooperation of the BRICS for the period up to 2020, which aims to intensify joint efforts and resources of the Association countries to minimize the impact of external negative factors on their socio-economic development, includes about 50 projects, also in the field of traditional and alternative energy, as well as mining. The proposals described in the draft are aimed at developing both bilateral and multilateral interaction between BRICS members, including establishing practical cooperation in the field of water resources and implementing various joint projects on product sharing in the oil and gas sector and in the field of renewable energy.

In addition, in practical terms, the New Development Bank of BRICS (NDB), as a mechanism for investment cooperation in this area, is already playing a special role in activating multilateral energy cooperation. Thus, the first approved projects involved joint investments in renewable energy in China, Brazil, South Africa and India for $ 811 million, as well as in the development of small-scale energy in Russia's Karelia. The national Bank for economic and social development of Brazil (Banco Nacional de Desenvolvimento Económico e Social, BNDES), operating under the Ministry of development, industry and foreign trade of Brazil, received a target loan of $ 300 million for the construction of environmentally friendly solar and wind power facilities that can generate up to 600 MW.

The Indian project included a loan of $ 250 million to one of the oldest Indian state-owned banks, Cañara Bank, for the subsequent financing of green energy projects. According to preliminary calculations, it will generate 500 MW of energy and prevent 800 thousand tons of hydrocarbon emissions into the atmosphere. Chinese company Shanghai Shenzhou New Energy Development Co Ltd., specializing in the production of solar panels, allocated $ 81 million to create solar generators with a total capacity of 100 MW. The African state-owned company Eskom will receive $ 180 million to implement a project to build power lines and to finance independent producers in the field of renewable energy. In order to develop the national alternative energy and energy system of the Republic of Karelia from "green" sources, Russia has also submitted a project to create small hydroelectric power stations in this region of the country. It is planned to finance the construction of "Beloporozhskaya HPP-1" and "Beloporozhskaya HPP-2" with a total capacity of 50 MW in two tranches of $ 50 million through the Eurasian Development Bank (EDB) and the International Investment Bank (IIB).

In February 2020, the Ministry of Energy in Russia, together with the scientific community, developed a concept for BRICS energy cooperation for the period of Russian presidency and asked the meeting participants to focus on the content of the concept when completing their activities on the energy line. In addition to the main energy track, energy as part of the program is discussed at the BRICS Academic forum, within the framework of the Council for scientific, technological and innovative development within the BRICS framework and included in THE BRICS economic cooperation concept.

It is necessary to ensure coordination of work on the entire energy track within the BRICS framework under the leadership of the Committee of senior officials on energy. This coordination will provide an opportunity to obtain additional synergistic effects, avoid duplication of tasks and allow to promote the priorities of the state energy policy. In addition, the Ministry of Energy in Russia has prepared a draft roadmap for energy cooperation until 2025, which will be discussed with partners during the year. It is planned to sign up for the Ministerial meeting to be held in October 2020.

Today, Russia plays a key role in the development of energy cooperation between the BRICS countries, which is due to its position as a world energy power and a leading exporter of resources to the world market. Defining as the main measure of energy partnership, Russia initiates the establishment of the main formats of interaction of the Association's participants in this area.

Taking into account Russia's priorities and the key tasks facing its BRICS countries, it is obvious that energy cooperation within the group will develop in two parallel directions: multilateral and bilateral. The first one includes issues of an international nature related to the interest of countries in increasing their weight on the world stage, creating stabilization mechanisms, increasing transparency, and ensuring international obligations, including environmental challenges. The second vector relates to the strengthening and expansion of existing bilateral trade and investment ties.

China
Source: www.ndb.int

The Board of Directors (BoD) of the New Development Bank (NDB) held its 23^rd meeting virtually on February 18, 2020.

At the meeting, the Board was briefed on the Bank's work arrangements following the outbreak of the novel coronavirus.

The Board commended the Government of China on its actions and measures to fight against the outbreak of novel coronavirus pneumonia. The Board and Management of the Bank affirmed that the NDB stands firmly by China and its people at this important time, including through providing emergency financing.

The Board was updated on potential NDB emergency funding to China to assist in fighting the novel coronavirus pneumonia outbreak – NDB Emergency Assistance Program in Combatting COVID-19. The Board would give consideration to providing an emergency sovereign loan to China to support its prevention and control measures against the new coronavirus. The potential loan amount would depend on the assessment of the actual needs and the final decision by the Chinese Government and the NDB.

The Board of Directors decided that its next meeting will take place on March 24-25, 2020 in Moscow.

Background Information

The NDB was established by Brazil, Russia, India, China and South Africa to mobilize resources for infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries, complementing the existing efforts of multilateral and regional financial institutions for global growth and development.

Russia
Source: www.bricsjournal.news

St Petersburg was the venue of the 1st Meeting of BRICS Sherpas/Sous-Sherpas during the Russian BRICS Chairmanship in 2020, led by Deputy Foreign Minister and Russian Sherpa in BRICS Sergey Ryabkov.

The parties conducted a detailed exchange of opinions and reviewed topical matters regarding five-sided cooperation, including ways of further consolidating such collaboration and boosting the efficiency of existing working mechanisms along all three areas of BRICS strategic partnership, namely, politics and security, the economy and finance, cultural and humanitarian contacts.

They submitted an updated version of the five BRICS countries' Events Calendar for 2020. There are plans to hold over 150 meetings and forums, including over 20 at the level of ministers and heads of departmental agencies. The Russian side unveiled the priorities of the Russian BRICS Chairmanship in 2020 under the motto BRICS Strategic Partnership for Global Stability, Shared Security and Innovative Growth.

Sergey Ryabkov held bilateral meetings with the heads of the delegations from the BRICS countries on the sidelines of the event.

India
Source: www.epw.in

The Sustainable Development Goals make it imperative to link economic growth with social and environmental priorities. The current status of social development perspective and the role of government, corporate and social enterprises in delivering social sustainability in India are examined. Constraints such as fiscal procyclicality and vulnerability, lack of access to finance for social enterprises, and biases in corporate social responsibility activities lead to dismal performances in social development. There is a need to engage in non-concessional finances with public and private funds for financing social sustainability. Impact investment is an emerging asset class, which lies at the intersection of private finance and purpose-driven finance.

The authors would like to thank the anonymous referee for their valuable insight and comments on an earlier version of the article.

The Sustainable Development Goals (SDGs) transcended the Millennium Development Goals (MDGs) on several accounts. One of the transformative changes has been in making the SDGs more inclusive by accommodating issues of human rights, inequality, gender empowerment and non-concessional finances1 for inclusive development. The objective of such an outreach activity is to accommodate the natural resource endowments, protect and promote indigenous cultures and people, and strongly entwine the dimensions of the triple bottom line.2 The vulnerability to social risks like civil conflicts or governance failures, and environmental risks like natural disasters or water scarcity, can lead to multidimensional and long-term damages. Out of 169 targets and 230 indicators of the SDGs, there is a strong commitment to deliver environmental and social sustainability along with economic growth. The United Nations Global Compact (UNGC) states that "social sustainability is about identifying and managing business impacts, both positive and negative, on people." Social sustainability entails stakeholder engagement, company–community cooperation, a people-centred approach to business impacts and inclusive social development.

India's social sector expenditure is around 2.6%, which is the lowest among the Brazil, Russia, India, China and South Africa (BRICS) nations (OECD 2016). The overall public expenditure on social infrastructure, which includes priority areas like health and sanitation, skill development and education, remained around 6% in the past six years (Department of Economic Affairs 2018). There have been conspicuous improvements in quantitative indicators such as physical infrastructure and completion rates, but lack in terms of social impact and qualitative indicators. For example, according to the National Health Profile 2018, there are some noteworthy improvements in health indicators such as infant and maternal mortality rate. However, the doctor–population ratio has remained 10 times less than the World Health Organization (WHO) recommendations, and there is also a lack of medical qualifications and quality surveillance (Sharma 2017).

The United Nations Commission for Social Development (UNCSD) is the only commission mandated to advise on the social policy development and review the social perspective of the SDGs. In 2018, the commission decided to prioritise rising inequalities and focus on challenges coming through social protection net, labour market efficiency and fiscal policies (UNCSD 2018). A social protection net gives unemployment benefits, flexible labour markets and improved crisis response capacity(Ribe et al 2010). India scores 0.05 on the social protection index, which indicates that the social protection expenditure is at around 5% of the total poverty-line expenditure (McKinley 2013). Forty percent of India's social protection expenditure goes into labour market programmes. India has performed spectacularly well in such programmes.3 However, the biggest challenge faced by social sustainability in India is with regard to the fiscal measures. A meagre public spending on social infrastructure, loosely pursued regulatory and impact measurement processes, limited access to finance for social enterprises, and a weak strategic corporate social responsibility performance lead to such a challenge. India has a rich history of financing social development initiatives through grants, aids and philanthropy. The report on the World Social Situation concludes that philanthropic aids have been instrumental in increasing school enrolments, improved nutritional status and ultimately social protection for developing economies (UN 2018). However, the scale of operation of such activities is quite small and the benefits are confined to small cohorts only. Further, such aids have temporal limits and in most of the cases, they fail to enable a self-sustaining infrastructure. According to the UNGC–Accenture research study, most of the CEOs believe that a better integration of sustainability measures into the financial market is essential to help reshape the market to deliver the SDGs (GCNI 2018). India will offer market opportunities of $1 trillion for companies working in sustainable development spaces and will generate employment for around 72 million people by 2030 (Hindu 2017).

In spite of immense possibilities, there are allocation failures in financing the SDGs. For example, the estimated total annual global savings and total savings in long-term investment plans amount to $20 trillion and $40 trillion respectively, and the estimate for financing SDGs is $7 trillion (Roy 2017). Financing of the SDGs will help to reduce the systemic risk, especially for emerging economies and will give a higher financial rate of return. To confront the challenges of social sustainability, India needs to complement environmental and social priorities with development finance.4

Social Perspective: A Background

India is one of the fastest growing major economies in the world. According to the World Bank, India will grow at 7.3% in 2018–19 and will become the third largest economy by 2030 (World Bank 2019; FICCI 2018). In spite of its robust growth prospects, India continues to lag behind its South Asian neighbours and other similar economies in many social indicators. India also ranks much lower in the Human Development Index5 (HDI)and Human Capital Index6 (HCI) as compared to the other BRICS and South Asian nations. Table 1 illustrates the comparative performance of India and other South Asian countries on the HDI. The coefficient of human inequality for India is worse than Sri Lanka, Maldives and Nepal. In terms of public health expenditure, India performs poorly, along with Pakistan and Bangladesh. Most of the employment generated in India, that is, 80.8% of the total employment, is categorised as vulnerable employment.7 India also has the second highest per capita CO2 emission, after the Maldives. One interesting comparison can be drawn from that of India and Sri Lanka in terms of HDI performances. In spite of having a slower gross domestic product (GDP) growth rate, Sri Lanka outperforms India in almost all of the HDI indicators, except in some instances like public expenditure on education.

The comparative performance of India vis-à-vis the other BRICS nations and some advanced economies is presented in Table 2 for six social indicators. India performs poorly in two out of the six social indicators, namely life satisfaction and life expectancy. For trust as a social indicator, India is well ahead of other BRICS countries, but lagging behind rest of the four advanced economies. In the social cohesion indicator, India is just ahead of China and Brazil. However, in income inequality, India performs better and is just behind Canada and Australia. Therefore, the comparative analysis at the socio-economic level indicates requirement of substantial improvements in the social development space.

Social sustainability is the enabling platform for inclusive economic growth (Anand and Sen 2000). Environment and social priorities complement each other and contribute to economic growth (Longoni and Cagliano 2015). There are clear linkages between economic profits, environment protection and social prosperity at large. Two recent incidents in different parts of the country exemplify the case of strong interlinks between the above three dimensions. First is the case of Thoothukudi, where at least 11 people died in police firing as they were protesting against a United Kingdom-based mining company. This protest against the Sterlite unit of the company was a consequence of the environmental and societal damages caused by the smelter company. Overlooking of environmental guidelines has led to high concentration of toxins and thus resulting in air, water and soil contaminations, prevalence of respiratory infections and menstrual disorders. In spite of the fact that people were dying due to cancer and other infections and that the nearby marine system was being destroyed by the hazardous waste, the silence was only broken after two decades (Wire 2018). The violent suppression of the protest by the government was a clear violation of human rights and social justice. Negative economic impact can be seen through the ceasing of livelihood opportunities for its 15,000 subsistence workers and 35,000 other indirect jobs, and the 800 copper-dependent small- and medium-sized firms (Patel 2018).

The second case is of Shimla, which, in 2018, suffered a severe water crisis for many days. As more than three million tourists visit the city every year, the governments were selectively engaged in making necessary encroachments and constructions, and building malls and ropeways to promote it as a modern tourist destination. However, the authorities neglected the social and environmental aspects of economic growth, as is evident from the fact that there have been no new water source or rainwater harvesting plans in the last three decades. The health hazards started to pick up two years ago when the city experienced the biggest jaundice outbreak in the country after independence. The multiplier effect of ignoring a sustainable approach can be seen in multiple forms, as tourism is falling and health problems are taking a toll on the local people. Since the gross state domestic product (GSDP) of Himachal Pradesh significantly depends on the tourism industry, the state is going to face a serious negative economic impact (Tripathi 2018). To sum up, the two narratives explain how the rift between sustainability and development can lead to multidimensional problems and adversely affect economic growth. A strong sustainability framework is necessary to address issues pertaining to social development (Singh 2017). The role of the central as well as state governments becomes crucial in enabling the environment for social sustainability.

Social Sector Expenditure

The increasing gap between the growth rates in the agriculture (2.1%), manufacturing (4.4%), and service sectors (8.3%) is widening the inequality between the 44% of the population engaged in agriculture, and the remainder engaged in manufacturing and services (Department of Economic Affairs 2018; ILO 2018). Social sector spending helps to reduce such inequalities between the rich and the poor, and plays a key role in stimulating economic growth (Horton and El-Ganainy 2012). In fact, social sector expenditure is one of the key instruments towards facilitating companies to integrate sustainability in business operations (GCNI 2018). In India, there are evidences that the income effect of social protection programmes is double that of the total expenditures incurred (Sharma et al 2016). In spite of this, India's social sector expenditure has remained lower than its peers. Education and health have been two priority sectors for the governments. Even then, the total expenditure on health and education remains around 1.4% and 3.8% in comparison to the global average of 6% and 4.4% respectively (Kumar et al 2016). In terms of per capita health expenditure, India has 70% lower expenditure than that of average of BRICS nations (OECD 2016).

The social sector expenditure of the states and the centre remains around 7% and 2% of the GDP respectively (Kumar et al 2016). The states' expenditure on social sector as a percentage of the GDP has continuously increased, and the compound annual growth rate (CAGR) for the states' expenditure and the centre's expenditure are 19% and 17% respectively. Further, the Fourteenth Finance Commission has given more discretion to the states to utilise their untied resources from the share of central transfers (Chakraborty 2015). Therefore, the role of states has become more instrumental in financing the priority areas for social sustainability. The commitment of the states towards social development can be gauged by two parameters. One is the social allocation ratio, defined as the ratio of social sector expenditure to the total expenditure, and the second one is a development expenditure indicator defined as the ratio of social sector expenditure to the GSDP. Table 3 shows the past trends in these two indicators and highlights the priorities of different state governments towards its people. For the social allocation ratio, Chhattisgarh and Jharkhand are the outperformers whereas Punjab, erstwhile state of Jammu and Kashmir, and Haryana are the weakest performers. In terms of development expenditure indicators, the north-eastern region outperforms all the other states. Arunachal Pradesh and Mizoram are the front runners in social infrastructure expenditure from the north-eastern region. Punjab and Maharashtra are the two laggard states with around 5% social infrastructure expenditure only. Higher devolution to states has brought positive results for the overall states' expenditure on social development. Only four states, namely Goa, Haryana, Kerala and Rajasthan have reduced social allocation ratio in 2015–16. Table 4 shows the composition of social sector expenditure from 2009–10 to 2016–17. Education, arts and culture draw the highest financing of the total social sector expenditure followed by rural development and medical and public health. Expenditures related to labour market, labour welfare and social protection net draw 9.5%, and community welfare schemes get 7% of the total social sector expenditure.

There are constraints and limits to public spending in the social sector. One such constraint is the procyclical nature of fiscal policies for social development for major Indian states during positive output gaps (Kaur et al 2013). With a steep rise in crude oil prices, the fiscal vulnerability indicators are showing a stressed status for India (Table 5). Indicators, current account balance (CAB) and external debt as a percentage of the GDP show that the situation has worsened. As Table 5 indicates, the CAB has more than doubled from -0.63% to -1.84% and the external debt has increased by $58.4 billion (12.4%) in 2017–18. This will negatively impact public social sector expenditure. To achieve the objectives of social sustainability, India needs to augment public social sector spending with private sector participation.

Corporate Social Responsibility

Corporate social responsibility (CSR) integrates the social and environmental concerns to business operations and helps to delve into development through stakeholders' engagement (CEC 2001). CSR has gradually evolved from the philanthropic perspective in the 1950s towards environmental thinking in the 1970s, then to financial performance of the firms in the 1990s and finally towards adopting the strategic approach in the 21st century (Bocquet et al 2017). India is the first and the only country to mandate CSR spending for firms that cross the specified threshold levels, that is, they must contribute 2% of average net profits for social development. The law was enacted under Section 135 of the Companies Act, 2013 and came into effect from April 2014. Table 6 illustrates the performance of Indian companies in the three years since the mandatory CSR spending rule. The CSR spending is spread over all the 36 states and union territories and covers 29 development sectors. The total amount spent by 14,944 companies was ₹ 9,565 crore during 2014–15. The total amount spent during 2015–16 rose by 45% and was ₹ 13,828 crore by 19,184 companies. In total, the proportion in social sector spending for 2014–15 and 2015–16 was 72% and 79% respectively. However, pan India CSR spending decreased in 2015–16, though the nature of participation improved. Companies with zero spent decreased to 48%, and the proportionate amount spent by the top 20 companies decreased to 33% in 2015–16.8 Education, health and rural development have become the three main priority areas for CSR activities. An interesting change can be observed regarding the CSR contribution to centralised funds. For example, Clean Ganga and Swachh Bharat Kosh show a spectacular growth in fund allocation for CSR activities.



However, CSR has worked better for the developed countries only. The reasons for underperformance in India lie in the weak regulatory framework, lack of commitment towards environmental conservation, market pressures and minimal consumer awareness. From the corporate social performance (CSP) perspective, the track record for such investments is poor because of many reasons (Karnani 2018). Geographic bias is observed as one of the main reasons for such underperformance. In terms of CSR contribution, western and southern regions perform the best, while the eastern and north-eastern regions underperform. The deployment of CSR funds is concentrated to industrial regions mainly. This brings about an imbalance between the way the CSR fund is being spent and the communities who need it the most for social development.

The recent emergence of socially responsible investing (SRI) and other emerging funds9 will look into the CSR strategies of companies for allocating finances which will guide such companies to adopt more transparent and accountable practices. In that sense, companies should adopt practices that improve their corporate social performance and lead to better access to finance and lower cost of capital (Cheng et al 2014). Financial market intervention is one such mechanism that is required to enable sustained positive impact of CSR performance. Engaging in creating shared value for all the stakeholders by establishing impact-driven financing will reduce potential agency cost and frictions emanating from market imperfections. Financial market intervention in CSR expenditures will improve access to finance, and ultimately, the financial performance. One of the consequences of this has been in rise of impact-driven business models for social development.

Social Enterprises in India

Poverty alleviation, access to better healthcare and quality education, and other pressing social challenges can only be addressed by innovative business models. Social enterprises function as the bridge between social development and businesses (Tasavori et al 2016). There has been growing recognition and creation of social enterprises to address the pressing social challenges. The UNGC defines the social enterprise development "as creating and nurturing businesses that aim for positive social or environmental outcomes while generating financial returns." Recent academic research argues for giving it a more meaningful purpose through social value creation (Zahra et al 2009). The total number of estimated social enterprise operating in India is around two million (British Council 2016). Table 7 shows the total number of social enterprises in India operating under various affiliations. There are 592 registered farmer producer companies (FPCs) having 100% prevalence rate as recognised social enterprises, whereas micro, small and medium enterprises (MSMEs) and cooperative societies together constitute around 1.88 million of the social enterprises. In addition, there are 2,00,000 recognised social enterprises affiliated under non-governmental organisations (NGOs) and Section 8 companies. Social enterprises have mainly been confined to small business firms and NGOs, which failed at scaling up the innovation in spite of high product potential (Bornstein 2007).

Financial market imperfections restrict the access to finance for many poor entrepreneurs with high potential business models. The World Bank enterprise survey on India highlights that the proportion of lack of finance is higher for small and medium firms in comparison to large firms (Table 8). The working capital is a prime barrier for small- and medium-sized firms, for instance, only 12.8% of the working capital is financed by banks for small firms as compared to 17.8% for all firms. Similar trends can be observed for the value of collateral required for loans. Further, the stressed status of Indian banks, particularly the public sector banks, leads to higher levels of vulnerability for small- and medium-sized firms. Interestingly, such small firms outperform the medium- and large-sized firms in annual sales growth, annual labour productivity growth and gender equality in terms of majority ownership. Social enterprises help to address the key issues of gender inequality and vulnerable employment.

Social enterprises have ambiguous legal status, lack of recognition and awareness, and there is a sceptic outlook towards short-term financial returns that makes the business environment discouraging. According to the British Council report, three main growth barriers for social enterprises are: access to finance, access to grant funding and cash flow constraints. For example, 86% of the social enterprises expressed that the access to finance is one of the major constraints (British Council 2016). Lack of access to investors is another prevalent constraint more pronounced in the north-eastern region. Reasons for such constraints are limited network of entrepreneurs, limited funds and limited performance records. The development disparities across states and between the rural–urban divide exemplify the need for policy advocacy at the state and district levels to enable the social enterprise ecosystem in India. To meet the development challenges of India's social sustainability, India needs to focus on social enterprise development by enabling a social innovation ecosystem. One of the key requirements to make social enterprises prosper is to incorporate financial markets with better understanding of long-term social impact and better impact measurement metrics. Impact investment is one such emerging asset class, which is drawing the attention of the private investors as well as government institutions.

Impact Investment in India The Global Impact Investing Network (GIIN) defines impact investments as the investments "made into companies, organisations, and funds with the intention to generate social and environmental impact alongside a financial return." The growing impact investment market provides capital to address the world's most pressing challenges in sectors, such as sustainable agriculture, clean energy, microfinance and affordable and accessible basic services, including housing, healthcare, and education. India is one of the most advanced markets globally for impact investment. A large population at the bottom of the pyramid (BoP) with lack of access to basic services and low public spending on the social sector are two of the prime reasons to promote impact investment. The genesis of impact investment in India was in 1982, with the Ashoka Foundation providing grants to social entrepreneurs. The Grassroots Innovations Augmentation Network in 1997 and Aavishkaar in 2001 were India's first non-profit and for-profit venture capital funds respectively (ADB 2012). Table 9 shows the impact investment scene in India for the 2010–16 period. The total sum of $5.2 billion was reached with 14% average annual growth rate. The total number of deals signed was 485 with the average deal valued at $17.6 million. The financial returns on these investments ranged from -46% to 153% with a 10% weighted average internal rate of return (IRR). One interesting result has been in terms of the correlation between deal size and performance volatility For deal sizes that exceed $5 million, the IRR remains relatively stable and between 0% and 18%, however, the IRR for small deal sizes (below $1 million) is more volatile and in the range of -28% to 84% (McKinsey and Company 2017). Impact investing in India may grow at a 20% annual growth rate with a total of $8 billion in deployment. The changing attitude of millennial entrepreneurs, increasing number of fund managers for impact-driven funds, and strategic makeover in CSR activities are improving the prospects of impact investment in India.

There are many global and local philanthropic organisations that are presently working in the realm of impact investment. The Rockefeller Foundation and Omidyar Network are two leading organisations. The Rockefeller Foundation has been at the centre of action. It was the first to publish a research note on the impact investment as the emerging asset class in collaboration with social finance at J P Morgan. It also collaborated with the UNGC to design a framework for social enterprises and impact investment. Omidyar Network in many of its engagements around the world and across India has conducted many social impact investments. For example, recently in Odisha, it helped to discover and map 2,000 slum households using innovative technology at the grassroots level in collaboration with Tata Trusts(Halder 2018). In addition to restricting any illegal encroachments, this will help to ensure better-targeted welfare activities and cease financial leakages. According to Impact Investors Council (IIC), one successful case of a social enterprise is Chetna Organic, funded by impact debt fund Caspian Impact Investments. The social enterprise covers an area of 35,000 acres across three states, creating sustainable livelihood opportunities for over 15,000 small and marginalised farmers in agriculture sector. Ulink Bioenergy, funded by Aavishkaar, is another successful story of a social enterprise in alignment with impact investment. Ulink Bioenergy is working in the climate change infrastructure sector, helping to reduce the costs of farming inputs for around 7,000 farmers. Impact investment can address the most important constraints to the social innovation ecosystem, which is the early stage financing known as "patient capital" and missing
middle finance (ANDE 2012).

Concluding Remarks

The economic growth story of India is marred by its present environmental and social conditions. The multidimensional problems stemming from the failures in the environmental and social dimensions hamper economic growth in the long run. India needs to develop a self-sustaining social infrastructure to improve its social development indicators, especially health and education. India confronts major challenges in fiscal policies, early-stage funding for social enterprises and underperforming CSR activities. The increasing vulnerability in fiscal status is limiting public spending on social development. A greater extent of private participation and civil society engagement is required to deliver social sustainability. For example, $1 trillion will be required to build basic infrastructure, half the financing of which needs to be funded by the private sector (Roy Choudhury et al 2016). Policy advocacy is extremely necessary for increasing the financing for social inclusiveness. Social enterprises have the potential to extend India's growth story to the poor and deprived communities.

The upcoming synergy between corporate social performance and the financial market is directing financial markets towards purpose-driven finance. Alignment of impact investment with social enterprises is extremely necessary to facilitate sustainable development. Emergence of other asset classes under the umbrella of impact investment will enable the environment required for financing and sustaining social enterprises as well as the social innovation ecosystem. To sum up, India needs to substantially increase social sector spending, enable an environment for social enterprises, enhance private participation and show a strong commitment towards sustainable development. The implementation can be successful only when these policies become effective within impact-driven, strong, sustainability framework. The engagement of local stakeholders, transparent mechanisms, strict monitoring and innovative methods in practice are prerequisites for achieving social sustainability in India.

Notes

1 According to the OECD, concessional finance refers to loans provided at lower-than-market rates for developing economies and for longer time periods.

2 This refers to sustainability accounting framework that examines the economic, environment and social impact in order to evaluate a company's performance.

3 The Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), a rights-based framework to improve the rural livelihood security was launched in 2005, and accounts for 38% of the total social protection on expenditure (McKinley 2013). The programme is an excellent example of bringing gender equality and increasing backward communities' participation in local labour markets.

4 The UN DESA describes it as a set of all mechanisms for raising funds for development that are complementary to official development assistance, predictable and stable, and closely linked to the idea of global public goods.

5 The Human Development Report, 2016 released by the United Nations Development Programme (UNDP), addresses three premises: a long and healthy life, access to knowledge, and access to a decent standard of living. India ranks 131 out of 188 countries, the lowest among the BRICS countries, and behind Sri Lanka and Maldives in the South Asian region.

6 The Global Human Capital Report 2017 released by the World Economic Forum (WEF) is an index to measure how a country develops its human capital and talent resources holistically. India ranks 103 out of 130 countries, the lowest among the BRICS countries, and behind Sri Lanka and Nepal in the South Asian region.

7 The ILO defines vulnerable employment as the sum of the employment status groups of own-account workers and contributing family workers. Vulnerable employment is often characterised by lack of decent and formal working conditions, inadequate social security and low productivity.

8 The data pertaining to 2016–17 is provisional due to delay in the annual filing as reported by the Ministry of Corporate Affairs.

9 Funds like ethical investments, green investment and social impact bonds, in multiple priority areas like renewable energy by leading financial institutions like Yes Bank.

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