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C=f(P): The trust, ‘general public utility’, and charity as a function of profit in India

Published online by Cambridge University Press:  16 March 2018

RITU BIRLA
RITU BIRLA*
Affiliation:
Department of History, University of Toronto; Munk School of Global Affairs, University of Toronto, Canada Email: [email protected]
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Abstract

With an interest in historicizing contemporary philanthropic formations such as corporate social responsibility, this article outlines the modern Indian governmental coding of charity as a function of profit. To do so, it charts a trajectory of legal-fiscal policy on charitable tax exemption in India, especially since the 1940s. Informed by the study of vernacular capitalism, research on economization and on epistemologies of calculation, the analysis maps juridical trajectories on the idea of charity, its relationship with trade, and, more specifically, profit-making. It demonstrates how the legal mechanism of the public trust, which serves in the late nineteenth century to institutionalize a strict distinction and separation between charity and profit-making, later reconfigures and connects them by buttressing the main legal criterion for charity in India, that is, ‘general public utility’. This legal story is deployed to draw attention to philanthropy more broadly as a key terrain for research on processes of economization and neoliberal governing. At the same time, the argument also works against the grain of palimpsests in contemporary public discourse which stage a continuous and direct line from pre-colonial vernacular practices to Indian philanthropy today.

Type
Research Article
Information
Modern Asian Studies , Volume 52 , Special Issue 1: Charity and Philanthropy in South Asia , January 2018 , pp. 132 - 162
Copyright
Copyright © Cambridge University Press 2018 

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References

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2 The United Nations Industrial Development Organization's (UNIDO) definition of CSR, cited in Rai, S. and Bansal, S., ‘An Analysis of Corporate Social Responsibility Expenditure in India’, Economic and Political Weekly, 49:50 (13 December 2014), p. 1Google Scholar: http://www.epw.in/search/site/Rai%20and%20Bansal, [accessed 22 December 2017].

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5 The approach here thus deploys histories of political economy and economization to supplement an established body of work in South Asian anthropology, which has investigated the multiple cultural meanings and subjectivities of vernacular (beyond only vernacular mercantile) gifting, their performances of the impossible ideal of the gift given without expectation of return (the dharmic gift, or in Judeo-Christian morality, the ‘free gift’), and their instrumentalities in establishing social power and hierarchies. See especially Laidlaw, J., Riches and Renunciation: Religion, Economy, and Society Among the Jains, Oxford: Clarendon Press, 1995Google Scholar; Bornstein, E., ‘The Impulse of Philanthropy’, Cultural Anthropology, 24:4 (2009), pp. 622–651CrossRefGoogle Scholar; Osella, C. and Osella, F., ‘Muslim Entrepreneurs in Public Life Between India and the Gulf: Making Good and Doing Good’, Journal of the Royal Anthropological Institute (N.S.), 15 (2009), pp. S201–S221CrossRefGoogle Scholar; and Copeman, J., ‘The Gift and its Forms of Life in Contemporary India’, Modern Asian Studies, 45:5 (2011), pp. 1051–1094CrossRefGoogle Scholar.

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8 The trust mechanism also regulates gifts for private purposes, predominantly for the aid of family and securing of estates across generations; these do come under tax provisions and are regulated by the Indian Trusts Act, 1882. This article focuses specifically on the public charitable trust.

9 This remapping regulates all kinds of institutions of vernacular gifting, not just mercantile, for they are coded as ‘private trusts’ and, ultimately, are subject to taxation. For this history, see Birla, R., Stages of Capital: Law, Culture and Market Governance in Late Colonial India, Durham, NC: Duke University Press, 2009, Chapters 2 and 3CrossRefGoogle Scholar.

10 Ibid., Chapter 2. On British jurisprudence's engagement with the moral meanings of charity as presented in the 1601 Statute of Elizabeth through to the twentieth century, see Carter, H.G. and Crawshaw, F.M (eds), Tudor on Charities: A Practical Treatise on the Law Relating to Gifts and Trusts for Charitable Purposes, fifth ed., London: Sweet and Maxwell, 1929Google Scholar. On the lack of weight of the Elizabethan definition of charity in India, see the Indian Supreme Court judgment presented by Justice P.N. Bhagwati on behalf of himself, Justices N.L. Untwalia, and V.D. Tulzapulkar in Additional Commissioner of Income-Tax, Ahmedabad, Gujarat vs Surat Silk Cloth Manufacturer's Association, Surat on 19 November 1979, 1980 AIR 387; also 1980 SCR (2) 77.

11 Birla, Stages of Capital, Chapter 2.

12 Bayly, Rulers, Townsmen and Bazaars, p. 376.

13 See Foucault, Birth of Biopolitics.

14 ‘Mortmain’ was a Roman law term that referred to the influence of the ‘dead hand’—from Latin, manus mortus—of the testator on the future use of their property. See Birla, Stages of Capital, pp. 68–73.

15 Çaliskan and Callon, ‘Economization Part 1’, p. 370.

16 Ibid. See also Callon, M., The Laws of the Markets, Oxford: Blackwell Publishers, 1998Google Scholar. The concept of peformativity derives from the work of the linguistic philosopher J.L. Austin on the speech-act, that is, on forms of speech that, in their speaking, also act, as in the judge's statement ‘I now pronounce you man and wife.’ Austin's presuppositions (for example, his ideas of context and ritual) have been unpacked philosophically, as in Derrida, J., Limited Inc, Evanston, IL: Northwestern University Press, 1990Google Scholar, and Butler, J., Excitable Speech: A Politics of the Performative, New York: Routledge, 1997Google Scholar; in science studies, as in Callon, Laws of Markets, op. cit.; by anthropologists, as in Appadurai, A., Banking on Words: The Failure of Language in the Age of Derivative Finance, Chicago: University of Chicago Press, 2016Google Scholar; in critical legal studies, as in Birla, R., ‘Performativity between Logos and Nomos: Law, Temporality and the ‘Non-Economic Analysis of Power’, Columbia Journal of Gender and Law, 21:2 (October 2011), pp. 90–113, among other fieldsGoogle Scholar.

17 Çaliskan and Callon, ‘Economization: Part 1’, p. 371. A significant argument for the colonial as a research site and analytical ground for such study is Mitchell, Rule of Experts.

18 For recent critical reanimations of Weber, see Appadurai, Banking on Words.

19 These classic arguments can be found in Mauss, M., The Gift: The Form and Reason for Exchange in Archaic Societies, London: Routledge, 1990Google Scholar; Malinowski, B., Argonauts of the Western Pacific: An Account of Native Enterprise and Adventure in the Archipelagoes of Melanesian New Guinea, London: G. Routledge and Kegan, 1922Google Scholar.

20 Bourdieu, P., Outline of a Theory of Practice, Cambridge: Cambridge University Press, 1977CrossRefGoogle Scholar. Bourdieu unfortunately rests his insights on problematic temporal politics—the distinction between ‘primitive’ misrecognition of the gift as an exchange-calculation and ‘modern’ calculatedness. Colonial modernization enforces the ‘primitive’ idea of the charitable gift as unidirectional and outside exchange, challenging the politics of Bourdieu's temporalizing.

21 For an overview on economic anthropology approaches, see Hann, C. and Hart, K., Economic Anthropology: History, Ethnography, Critique, Malden, MA: Polity Press, 2011Google Scholar, which elaborates on approaches to Karl Polanyi's concept of ‘embeddedness’. A key reading of the continued relevance of embeddedness which has shaped economic sociology is Granovetter, M., ‘Economic Action and Social Structure: The Problem of Embeddedness’, American Journal of Sociology, 91:3 (1985), pp. 481–510CrossRefGoogle Scholar. For the original distinction between ‘embedded’ markets and the ‘disembedded’ or ‘self-regulating’ market, see Polanyi, K., The Great Transformation, Boston: Beacon Press, 1957Google Scholar.

22 Çaliskan and Callon, ‘Economization Part 2’. On the outsides that enable the framing of official markets and ‘the economy’ more abstractly, see Mathew, Johan, Margins of the Market: Trafficking and Capitalism Across the Arabian Sea, Berkeley: University of California Press, 2016Google Scholar.

23 For the detailed story, see Birla, Stages of Capital, Chapter 2.

24 Kalpagam, Rule by Numbers, p. 151. The idea that ‘profit’ itself is subject to history and a language of time is richly argued in Jonathan Levy's analysis of corporate accounting in twentieth-century America. See Levy, J., ‘Accounting for Profit and the History of Capital’, Critical Historical Studies, 1:2 (Fall 2014), pp. 171–214CrossRefGoogle Scholar.

25 Kalpagam, Rule by Numbers, p. 151.

26 Slaper, T.F. and Hall, T., ‘The Triple Bottom Line: What is it and How Does it Work?’, Indiana Business Review, 86:1 (Spring 2011)Google Scholar: http://www.ibrc.indiana.edu/ibr/2011/spring/article2.html, [accessed 14 December 2017]. Also Arora and Garg, ‘Corporate Social Responsibility’, p. 2.

27 See Birla, ‘Performativity Between Logos and Nomos’.

28 Indian Income Tax Act, Act XI of 1922, Section 4(3) at lawmin.nic.in/legislative/textofcentralacts/1922.pdf, [accessed 14 December 2017].

29 Income Tax Special Commissioners v. Pemsel, House of Lords, 20 July 1891, [1891] AC 531, [1891] UKHL 1.

30 In Re Macduff, (1896) 2 Ch 451. The Court of Chancery adjudicates cases in equity and trusts and the administration of estates, and is thus a mediator between the conventions of common law and statutory change.

31 In Re: The All-India Spinners Association vs Unknown on 8 April 1941, (1941) 43 BOMLR 742.

32 Ibid.

33 Judgment of the Lords of the Judicial Committee of the Privy Council, delivered 27 June 1944. All India Spinners Assn. vs Commissioner of Income-Tax on 27 June 1944, (1945) 47 BOMLR 233.

34 Ibid.

35 Andhra Chamber of Commerce vs Commissioner of Income-Tax on 22 February 1961, 1961 42 ITR 503 Mad.

36 Ibid.

37 Chamber of Commerce, Hapur vs Commissioner of Income-Tax on 6 April 1936, 1936 4 ITR 397 All.

38 Ibid.

39 See Hariharan, N., Income Tax Law and Practice, 4th ed., New Delhi: Tata McGraw Hill, 2009Google Scholar, section 1.2.

40 Interestingly, this version of the Income Tax Act, now void, is not accessible online from any Indian government department. I am relying on the Supreme and High Court judgments that cite this section and its history.

41 Rudolph, L. and Rudolph, S., In Pursuit of Lakshmi: The Political Economy of the Indian State, Chicago: University of Chicago Press, 1987, Chapter 3Google Scholar.

42 For example, following in the spirit of her father's abolition of zamindari shortly after independence, Indira Gandhi had, just before her 1971 victory, led her minority government in measures seeking to nationalize the 14 largest commercial banks and deprive princes of their privileges and purses. Ibid., p. 108.

43 On the ‘conduct of conduct’ see Foucault, Birth of Biopolitics, especially the lectures of 21 March 1979, 28 March 1979, and 4 April 1979.

44 Sole Trustee Loka Shikshana Trust vs Commissioner of Income Tax on 28 August 1975, 1976 AIR 10, 1976 SCR (1) 461.

45 Ibid. Judgment written by Justice H.R. Khanna.

46 Indian Chambers of Commerce vs Commissioner of Income Tax, West Bengal, Calcutta on 17 September 1975, 1976 AIR 348, 1976 SCR (1) 830.

47 Ibid. Judgment written by Justice V.R. Krishnaiyer.

48 Ibid.

49 Ibid.

50 Additional Commissioner of Income Tax, Gujarat vs Surat Art Silk Cloth Manufacturers’ Association on 19 November 1979, 1980 AIR 387, 1980 SCR (2) 77.

51 Commissioner of Income Tax, New Delhi vs Federation of Indian Chambers of Commerce on 15 April 1981, 1981 AIR 1408, 1981 SCR (3) 489.

52 Ibid.

53 The literature on risk and the liberal state in the nineteenth century is extensive for both the UK and the USA. See, for example, O'Malley, P., Risk, Uncertainty and Government, London: GlassHouse, 2004Google Scholar. For broader definitions of ‘risk society’ see Beck, Ulrich, Risk Society: Towards a New Modernity, (trans.) Mark Ritter, London: Sage, 1992Google Scholar; and Giddens, Anthony, ‘Risk and Responsibility’, Modern Law Review, 62:1 (1999), pp. 1–10CrossRefGoogle Scholar.

54 Indian Companies Act, 2013, at http://www.mca.gov.in/Ministry/pdf/CompaniesAct2013.pdf, [accessed 14 December 2017]; Indian Chamber of Commerce vs Assessee, in the Income Tax Appellate Tribunal Kolkata Bench ‘C’. ITA No. 149 1/Kol/2012 and ITA No. 12 84/Kol/2012. http://indiankanoon.org/doc/100578519/, [accessed 14 December 2017].

55 On this point, see Venkatesan, Rashmi, ‘Ordering Corporate Responsibility: A Misplaced Faith?’, Economic and Political Weekly, 58:38 (21 September 2013).Google Scholar

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57 Rai and Bansal, ‘An Analysis of Corporate Social Responsibility Expenditure in India’.

58 For more on the recasting of the robust nineteenth-century understanding of corporate life into the legality of the corporate person, see Birla, R., ‘Maine (and Weber) Against the Grain: Towards a Postcolonial Genealogy of the Corporate Person’, Journal of Law and Society, 40:1 (March 2013), pp. 92–114CrossRefGoogle Scholar.

59 Indian Chamber of Commerce vs Assessee on 2 December 2014, p. 33.

60 For an early but important analysis of the significance of the language of ‘community’ in neoliberal governmentality, see Rose, Nicholas, ‘Death of the Social? Re-figuring the Territory of Government’, Economy and Society, 25:3 (1996), pp. 327–356CrossRefGoogle Scholar.

61 Ramesh Mangaleswaran and Ramya Venkatamaran, ‘Designing Indian Philanthropy for Impact’, McKinsey on Society: http://voices.mckinseyonsociety.com/india-philanthropy-impact/, [accessed 14 December 2017].

62 Ibid.

63 Matthew Cherian, CEO of HelpAge India, in Sandeep Singh, ‘Charity a rarity in India’, Hindustan Times, 28 May 2010: http://www.hindustantimes.com/business/charity-a-rarity-in-india-inc/story-UphkIhdSSkWe6oP7cnwv5K.html, [accessed 22 December 2017].

64 Cited in Afsharipur, A., ‘Directors as Trustees of the Nation? India's Corporate Governance and Corporate Social Responsibility Reform Efforts’, Seattle University Law Review, 34:995 (2011), p. 1012Google Scholar.

65 For a primary source review, see Gandhi, M. K., My Theory of Trusteeship, (ed.) Hingorani, A.T., Mumbai: Bharatiya Vidya Bhavan, 1970Google Scholar. On Gandhi and the trust contact, see Birla, Stages of Capital, pp. 103–104. On Gandhian trusteeship as a forerunner of CSR, and as an early ground for a ‘business-society interface’, see Chakrabarty, B., ‘Universal Benefit: Gandhi's Doctrine of Trusteeship: A Review Article’, Modern Asian Studies, 49:2 (2015), pp. 572–608CrossRefGoogle Scholar.

66 Dasgupta, A.K., Gandhi's Economic Thought, London: Routledge 1996, p. 125CrossRefGoogle Scholar.

67 Confederation of Indian Industry, Handbook on Corporate Social Responsibility in India (2014) at www.pwc.in, [accessed 14 December 2017].

68 An earlier draft of this line of argument was presented at the Center for South Asia at Stanford University. I thank Thomas Blom Hansen for the invitation, his comments, and the engaged audience.