SMEs need to be included in CSR activities: UNIDO

A UN body has asked India to modify a Rs 6,000-crore cluster development scheme for micro, small and medium enterprises (MSMEs), making them shoulder corporate social responsibilities, including environment-related issues.

The United Nations Industrial Development Organisation (UNIDO) suggested the government that it should “suitably modify the existing cluster development schemes by various ministries to include socially and environmentally relevant activities, thus fostering inclusive growth”.

The government has made a provision of Rs 6,000 crore during the Eleventh Five-Year Plan for improving infrastructure in different clusters of MSMEs. The UNIDO said its recommendations on the corporate social responsibilities for the MSMEs have been made based on studies done in five clusters. These are Ludhiana (knitwear garments), Jalandhar (sports goods), Tiruchirapalli (engineering fabrication), Kalady (rice milling), and Moradabad (brass metalware industries).

The UN strongly suggested involvement of the stakeholders like financial institutions, credit rating agencies and companies or large buyers having SMEs in their supply chain. Even business schools which train the future managers should place emphasis on CSR.

“Most of the information and experiences available about responsible behaviour across the world are about large enterprises. MSMEs have either been left out of the CSR movement or their role has not been adequately appreciated,” it said.

According to estimates, there are about 13 million small enterprises in the country providing employment to more than 40 million people. These enterprises contribute 45 per cent of industrial production and 40 per cent of the direct exports of the country.