International experts identified that Corporate Social Responsibility (CSR) must not be explained through tax planning policy alone but should be explained within the framework of corporate philosophy, which determinants the needs of the community and the regions in which a corporate entity functions.
Over the world No doubt, CSR is a leading business management concern. In Pakistan CSR, regular multinational firm engagement is an early stage. Domestic firms because of resource constraints, political alter, cultural tradition, crisis effects, and lack of competition are not paying the required attention. Sources recorded that the banking industry plays a tremendous role in financial transactions, business investment, loan provisions, and many other activities to generate economic growth. It is said that there is an association between the financial sector and social investment in health, education, development, employment, sports, and the environment.
| Pakistan: Sectoral Point Contribution At Constant Prices 2015-16 | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| 2019-20 | 2020-21 | 2021-22 | 2019-20 | 2020-21 | 2021-22 | 2019-20 | 2020-21 | 2021-22 | |
| As percent of GDP | Growth Rates (%) | Point Contribution | |||||||
| A. Agriculture | 23.5 | 23.0 | 22.7 | 3.9 | 3.5 | 4.4 | 0.88 | 0.82 | 1.01 |
| B. Industry | 18.5 | 18.9 | 19.1 | (5.7) | 7.8 | 7.2 | (1.1) | 1.45 | 1.36 |
| Commodity Producing Sector (A+B) | 42.1 | 41.9 | 41.8 | (0.6) | 5.4 | 5.7 | (0.2) | 2.27 | 2.37 |
| C. Services Sector | 57.9 | 58.1 | 58.2 | (1.2) | 6.0 | 6.2 | (0.7) | 3.48 | 3.59 |
| GDP (GVA) | 100 | 100 | 100 | (0.94) | 5.74 | 5.97 | (0.94) | 5.74 | 5.97 |
Experts recorded that Pakistan is no exception to the aforementioned context of developing states. Perhaps, our country became acquainted with CSR for the first time when the issue of child labor in the football industry (Sialkot, Pakistan) hit the international headlines. This epidemic challenge gave rise to the emergence of national and international NGOs, particularly those NGOs which were working toward the awareness of CSR.
Studies identified that the most common approach to CSR is philanthropy. This includes donations (monetary) to dissimilar organizations to enhance society as a whole, mainly in developing states through working on these social indicators of the economy. Furthermore, investing in higher education is akin to investing in the leaders of tomorrow, an investment that would always bring high returns and many advantages in the years to come. Studies also identified that education and healthcare remain neglected in various parts of our country because of insufficient public sector development programs.
Unluckily in a developing country like Pakistan where most people are illiterate and live below the poverty line, CSR tries to cater to all these challenges. It is also recorded that for most developing nations, the concept of CSR is still new. Pakistan is no exception and not much work has been done in Pakistan.
According to government officials, income distribution also matters in poverty alleviation. Over the years, statistics showed that the pattern of income distribution in Pakistan, measured in terms of the Gini Coefficient and household income share of the lowest and the highest 20 percent for rural and urban areas has been mixed and moderate. The Household Income and Expenditure Surveys (HIES) undertaken periodically from 1961-64 to 2018-19, offers data for the selected years. The Gini Coefficient of household income had been almost 0.35 or below since the 1960s, reaching 0.407 in 1990-91, 0.410 in 1998-99, and after that, it started falling because of enhanced poverty situation and stood at 0.30 in 2018-19 as against to 0.33 in 2005-06. The persistent fall in poverty owing to well-targeted poverty reduction programs by the government. Furthermore, statistics also explained in 2016-17 it stood at 8.5 percent of GDP, 8.1 percent of GDP in 2017-18, 7.1 percent in 2018-19, 7.9 percent in 2019-20, while it slightly dropped to 7.7 percent of GDP in 2020-21. However, in absolute terms, it increased to Rs 4,282.14 billion as against Rs 3760.50 billion in 2019-20. The PRSP expenditures as a percentage of GDP varies because of rebasing of National Accounts from 2005-06 to 2015-16. The government officials also recorded that toward promoting sustainable and inclusive development, a fundamental role of the government of Pakistan is to offer necessary public goods and services and, where necessary, direct support to households to tackle poverty and meet redistribution goals. Development can only thrive when there is an investment in people and where governments are responsive and accountable to their citizen’s social and economic security. It is also said that our government is committed to making real improvements in people’s lives and implementing strategies that are aligned with poverty alleviation and SDGs indicators. The proper implementation of poverty alleviation programs and social safety net coupled with a reduction in the cost of living would go a long way in mitigating poverty and providing relief to the needy in the short run. Their impact, however, needs to be closely monitored to ensure access to the target group. The long-term remedy, however, remains to be sustained high economic growth with equity. The government is making strenuous efforts to achieve higher economic growth with an emphasis on human resource development. The Government of Pakistan can play a crucial role in organizing CSR values and knowledge among the business and the public by recognition for CSR achievement and spreading CSR information to attain better understanding. Government facilitation enables firms to engage in CSR to drive social and environmental improvements. Firms/companies for CSR should follow transparent principles and policies. Local firms need to acquire legal framework strategies, business ethics and standards. Government should proactively support the attempts of NGOs and companies in promoting the CSR agenda in our country. Public-private partnerships between the government and nonprofit organization can play a significant role in community development programs.