They may call it charity, but it is still just another tax.

"Who does business represent?" asked Prof Ricardo Hausmann. "The traditional view of the firm -- shared by both Karl Marx and Milton Friedman -- is that it is an organization owned by capitalists (shareholders), on whose behalf it is run. It hires workers and buys other inputs to maximize returns for those who put up the money. According to Friedman, the social responsibility of the firm is to increase profits. Any goal that does not directly benefit shareholders is just another distortionary tax." Indian politicians do not like businesses to make profits. They see businesses as a way to squeeze as much tax as possible and have imposed a Corporate Social Responsibility Law which forces companies to donate 2% of their profits for charitable work. It is a surreptitious tax and companies have spent money on whatever is easiest, but not vital, wrote A Karnani. Jawaharlal Nehru is reputed to have told JRD Tata, "Never speak to me of profit. It is a dirty word." If businessmen are restricted from making honest profits they will resort to underhand means. In a survey, 66% of Indians said that it is alright to pay bribes to win business and 80% of citizens think that businesses are corrupt. No wonder that only 2% of Indians invest in stocks, which forces companies to borrow from banks. Bank managers are not trained to understand business models or carry out due diligence. Public sector banks are loaded with bad debts, in some cases total loans are more then their net worth. Where there is money there will be corruption. Many bank managers succumbed to cash bribes or expensive presents. Philanthropy should be a personal choice -- from educating children to animal welfare to planting trees -- whatever seems most important to the person concerned. It is because of abject failure of the government in providing basic services, such as education, child health, or universal medical care, that there is a discussion of how philanthropy should be directed. When politicians get involved corruption spikes. There are over 3 million NGOs in India which was "mind-boggling" for the Supreme Court. "Most privately run philanthropic organizations do not understand their social responsibilities. 99% of the existing NGOs are fraud and simply moneymaking devices," observed Delhi High Court. In the US, universities have received billions in endowments but half of all Americans hate paying for Obamacare because it is enforced. The present ethos of "maximizing shareholder value" at all costs is hurting other stakeholders, like customers, workers and society, wrote Joe Nocera. It is time that business associations "gave voice to the network of stakeholders" and not just to shareholders, wrote Hausmann. In short good business practices are infinitely more valuable for society than enforced philanthropy. But, sly taxes please the vote bank.