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Civil Socities

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January 03, 2018

What do you understand by the term Social enterprise? Examine the relevance of such enterprises in resolving most of our societal challenges.

Refer – Business Line

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IAS Parliament 6 years

KEY POINTS

Social Enterprises

·         Social enterprises reconcile the essentials of democracy with the requirements of good economics.

·         They are democratic enterprises. They belong to the people, produce benefits for the people, and are run by the people.

·         Good economics demands that an enterprise be economically self-sustaining (i.e.) its income must cover its costs. Social enterprises do this.

·         Social enterprises need capital to start. They can obtain it from the state or from philanthropists.

·         While they do not produce profits for their capital providers, they produce enough economic margins in their operations to return the capital.

·         E.g. Amul & SEWA in India. Grameen Organisation in Bangladesh.

·         The success of a social enterprise is measured by the public benefits it produces.

Relevance

·         Social enterprises improve citizens’ well-being in following ways – 

·         Capitalist business enterprises generate large amounts of wealth for their investors and top executives.

·         Wealthy people are being pressed to give more to philanthropy and corporations to give more to CSR.

·         This gave stimulus to arguments for reducing taxes on corporations and wealthy people.

·         Whereas the reduction of taxes reduces the state’s own financial resources to address societal problems, some portions of this wealth are cycled through philanthropy and CSR to address these problems.

·         In this way, the people below become dependent on the ‘trickle down’ from the accumulating wealth at the top.

·         Social enterprises enable people to stand on their own feet, reducing dependence on the charity of others.

·         They also use all their energy to produce what people need, not distracted by the need to increase shareholder’s financial return.

·         Moreover, they can enable the entire economic edifice to be more sustainable than it is by not draining either philanthropic or state tax resources.

·         The resources of philanthropists’ and the state are sustained, and can be invested in more social enterprises.

·         Thus, social enterprises are a solution that can resolve most of our societal challenges such as increasing inequity, persistent poverty, and poor public health and education.

pradeep kumar BEHARA 6 years

plz review...

IAS Parliament 6 years

Good Answer. Keep writing. 

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