CHAPTRE 1

1.1 ABOUT THE COMPANY

NATIONAL THERMAL POWER COOPERATION

NTPC, the largest power Company in India, was setup in 1975 to accelerate power development in the country.

It is among the world’s largest and most efficient power generation companies. In Forbes list of World’s 2000

Largest Companies for the year 2007, NTPC occupies 411th place.

NTPC has installed capacity of 29,394 MW. It has 15 coal based power stations (23,395 MW), 7 gas based power

stations (3,955 MW) and 4 power stations in Joint Ventures (1,794 MW). The company has power generating

facilities in all major regions of the country. It plans to be a 75,000 MW company by 2017.

NTPC has gone beyond the thermal power

generation. It has diversified into hydro

power, coal mining, power equipment

manufacturing, oil & gas exploration,

power trading & distribution. NTPC is now

in the entire power value chain and is

poised to become an Integrated Power

Major.NTPC's share on 31 Mar 200 8 in the

total installed capacity of the country was

19.1% and it contributed 28.50% of the

1

total power generation of the country during 2007-08. NTPC has set new benchmarks for the power industry both

in the area of power plant construction and operations. With its experience and expertise in the power sector,

NTPC is extending consultancy services to various organizations in the power business. It provides consultancy in

the area of power plant constructions and power generation to companies in India and abroad.

In November 2004, NTPC came out with its Initial Public Offering (IPO) consisting of 5.25% as fresh issue and

5.25% as offer for sale by Government of India. NTPC thus became a listed company with Government holding

89.5% of the equity share capital and rest held by Institutional Investors and Public. The issue was a resounding

success. NTPC is among the largest five companies in India in terms of market capitalization.

Recognizing its excellent performance and vast potential, Government of the India has identified NTPC as one of

the jewels of Public Sector 'Navratnas'- a potential global giant. Inspired by its glorious past and vibrant present,

NTPC is well on its way to realize its vision of being "A world class integrated power major, powering India's

growth, with increasing global presence".

Vision

A world class integrated power major, powering India's growth with increasing global presence.

Mission

Develop and provide reliable power related products and services at competitive prices, integrating multiple

energy resources with innovative & Eco-friendly technologies and contribution to the society

Core Values – BCOMIT

Business ethics

Customer Focus

Organizational & Professional Pride

Mutual Respect & Trust

Innovation & Speed

Total Quality for Excellence

2

1.2 COMPANY PROFILE

Future Of The Generation Business

Developing and operating world-class power stations is NTPC's core competence. Its scale of operation, financial

strength and large experience serve to provide an advantage over competitors. To meet the objective of making

available reliable and quality power at competitive prices, NTPC would continue to speedily implement projects

and introduce state-of-art technologies.

Total Capacity Portfolio

India's generation capacity can be expected to grow from the current levels of about 120 GW to about 225-250

GW by 2017. NTPC currently accounts for about 20% of the country's installed capacity and almost 60% of the

total installed capacity in the Central sector in the country. Going forward, in its target to remain the largest

generating utility of India, NTPC would endeavour to maintain or improve its share of India's generating capacity.

Towards this end, NTPC would target to build an overall capacity portfolio of over 66,000 MW by 2017.

Fuel / Energy Mix For Capacity Addition

Currently, coal has a dominant share in the power generation capacities in India. This is also reflected in the high

share of coal-based capacities in NTPC's current portfolio. With high uncertainties involved in Domestic gas/

LNG, both in terms of availability and prices, NTPC would continue to set up large pit-head coal based projects,

including few integrated coal cum power projects. To reduce the dependence on fossil fuels, there is a need to

push for renewable sources of power in the sector. NTPC would avail of opportunities to add hydropower to its

portfolio subject to competitive tariffs. A first step in this direction has already been taken with the investment in

Koldam Hydro Power Project. NTPC would continue to closely monitor developments on nuclear front also and

be open to setting up around 2000 MW of Nuclear power generation capacity, possibly through a Joint Venture.

As a leader in power generation, NTPC would also consider other energy sources such as biomass, cogeneration,

fuel cells, etc for future development thereby reducing the dependence on thermal fuels.

While a decision on the fuel/energy mix for NTPC in the future would be largely governed by their relative tariff-

competitiveness, the fuel mix in 2017 may be different from the existing portfolio, though not very significantly.

Diversification Along The Value Chain

NTPC has achieved the distinction of being the largest thermal generating company in India. In the past, this

3

focus was adequate as the industry was highly regulated with limited diversification opportunities. Over last few

years, the country has been facing acute shortages, both in coal and gas, severely affecting optimum utilization of

its power stations and these shortages are likely to continue in future as well. This is in spite of the fact that India

is one of the largest producers of coal in the World. To safeguard its competitive advantage in power generation

business, NTPC has moved ahead in diversifying its portfolio to emerge as an integrated power major, with

presence across entire energy value chain. In fact, to symbolize this change, NTPC has taken on a new identity

and a new name 'NTPC Limited'. NTPC has recently diversified into coal mining business primarily to secure its

fuel requirements and support its aggressive capacity addition program. In addition, NTPC is also giving thrust on

diversification in the areas of power trading and distribution. Diversification would also allow NTPC to offer new

growth opportunities to its employees while leveraging their skills to capitalize on new opportunities in the sector.

Establishing A Global Presence

To become a truly global company serving global markets, it is essential for NTPC to establish its brand equity in

overseas markets. NTPC would continue to focus on offering Engineering & Project Management Services,

Operations & Maintenance services, and Renovation & Modernization services in the international market.

Establishing a successful services brand would be a precursor to taking higher investment decisions in different

markets. Going forward, NTPC would continue to evaluate various options for strengthening its presence in

global markets including setting up power generation capacity, acquisition of gas blocks etc.

Circa 2017: NTPC's Corporate Profile

By the year 2017, NTPC would have successfully diversified its generation mix, diversified across the power

value chain and entered overseas markets. As a result NTPC would have altered its profile significantly. Elements

of the revised profile that NTPC would seek to achieve are:

Amongst top five market capitalization in the Indian market

An Indian MNC with presence in many countries

Diversified utility with multiple businesses

Setting benchmarks in project construction and plant availability & efficiency

Preferred employer

Have a strong research and technology base

Loyal customer base in both bulk and retail supply

4

A leading corporate citizen with a keen focus on executing its social –responsibility

1.3RIHAND SUPERTHERMAL POWER STATION

THE VICINITY:

This region locally known as “ Dakshinachal” is now one of the major power centres in the country.besides two

other projects of NTPC viz.Singrauli (2000mw) aand vindhyachal (3269 mw) ,other power stations in the area are

– two thermal and two hydel stations of Govt. Of U.P.viz. Anpara thermal (1600MW) , obrathermal (1550MW),

Rihand hydel(300MW),Obra hydel (100MW). And also the Renusagar Power co.(732.5MW) of

Hindalco.industries in these area are,other than the coal mines Hindalco-a major aluminium producing

factory,kanoria chemicals and high tech carbon at Renukoot.

The foundation stone of Rihand super thermal power project was laid down on 9 February 1982. It is one of

the NTPC’s best power plants, in the northern region constructed by Northern Engineering Industries (U.K.).

Rihand completes the power triangle with Singrauli STPS, Vidhychal STPS. It is situated in Bijpur village and

in the industrial belt of the district- Sonebhadra of Uttar Pradesh, which is situated at the border of MP&UP.

This plant is situated at the south bank of Rihand Reservoir (Govind Ballabh Pant Sagar), made artificially. Its

area is about 50X10 sq.km. It is a large reservoir, having huge mass of water, from which five thermal power

plants and one hydro power plant takes water for operation.

The capacity of RhSTPP, Ist stage of 2X500 MW is in operation and IInd stage of the 2X500 MW plant under

construction and one unit has been synchronized in the month of March 2005 and the second unit has to be

synchronized till the month of November. High voltage direct current (HVDC) transmission system is the

unique feature of this power plant. It is used to transmit DC current from this plant to Delhi. In Rihand STPP,

coal from Amlori mines is used as a fuel to produce thermal energy. Coal normally contains 30% to 40% ash

content. When it is burned in the boiler furnace, it results in large amount of ash depositions in various regions

of the boiler via; water wall tubes, super heater tubes, reheater tubes, plugging of air heater baskets with the fly

ash. This soot deposition reduces the heat transfer from flue gases to water/steam flowing inside the tubes.

Therefore, its removal is very essential in the boiler. For this soot blowing system is used.

SALIENT FEATURE

Location: Bijpur village, Distt. Sonebhadra. (U.P).

Total proposed capacity: 3000 MW, in 3 stages each of 2X500MW

Total land (in acres): UP MP Total

5

4680 1752 6432

Power Evacuation: +/-500Kv HVDC Bipolar line to Dadri (Delhi), 400kV single circuit

AC line to Shaktinagar and Kaptur.

Beneficiary States: UP, Haryana, Punjab, Rajasthan, Jammu Kashmir,

Himachal Pradesh, Chandigarh and Delhi.

Financing: Export Credit of pound sterling 344million, aid from Govt. of

U.K. pound sterling 177 million. Govt. of India afforded the rest

Cost of the project.

Major Resources:

COAL

(a) Source -Amlori mines.

(b) Maximum consumption - 43,300MT/Day for 3000 MW (E-Grade Coal).

(c) Mode of Transportation - MGR Rail Transportation System.

WATER

(a) Source - Rihand Reservoir.

(b) Maximum Consumption – 300 cusecs.

(c) Maximum cooling water

Requirement -1500cusecs for 1000MW.

Chimney: - 224.5mts (RCC structure with steel flue).

Ash disposal: - Ash slurry pumped to Ash dyke.

Commencement of work: - 09/02/1983.

Unit-1 synchronized: - 31/03/1988.

Unit-2 synchronized: - 05/07/1989.

Unit-1 commercialized -01/01/1990

Unit-2 commercialized: - 01/10/1991.

6

1.4 INDUSTY PROFILE

The Indian power industry - an overview

General highlights

The power sector at this juncture is plagued by a number of problems. These include inadequate

generation capacities, poor capacity utilization, very high transmission losses and poor project

implementation.

Plant load factor (PLF) in most of the plants has been very low compared to the power plants in other

parts of the world.

The sector has been bogged down by resource constraints.

In India electricity tariffs are a politically sensitive issue and often create turmoil. This is the reason for

poor performance of most the state electricity boards (SEB) and has also resulted in serious financial

problems.

Till date, the players have not started giving adequate consideration to the alternate energy sources for

power generation.

Over the last few years, capacity addition has been consistently falling short of demand. This has

resulted in a sharp increase in power shortage across the country.

Sector comments:

Notwithstanding the massive increase in generation capacities over the past decades, the history of the Indian

power sector has been punctuated by shortages, massive pilferages and a demand-supply gap, which has been

growing. The shortages have been so chronic that, at times fears have been expressed about a negative impact on

industrialization due to these shortages.

Thus, while the figures for additional capacity being created may look impressive in isolation, the fact is that the

demand growth has always been higher than the supply. Further, the capacity additions are significantly below

the plan targets, particularly during the eighth plan, where the capacity addition of about 16,000 MW showed a

shortfall to the extent of about 40 per cent from the revised plan target of around 29,000 MW.

7

Industry players and profile

The power sector reveals that it can be largely segregated into four different categories on the basis of type of

players in the industry. These include:

Central Government Corporations: which consist of corporations like the National Thermal Power

Corporation (NTPC), Nuclear Power Corporation, National Hydro Electric Power Corporation (NHPC),

and some other smaller players.

State Government Corporations: which consist of the various state electricity boards and other

corporations that have been promoted by the respective government’s Poor management, transmission

and distribution (T&D) losses and poor recoveries of dues are some of the factors, which are responsible

for the plight of these corporations. Currently, the financial health of many SEBs is precarious and their

revenue-raising capabilities are more or less dependent on assured guarantees from the respective

governments.

Private Sector Licensees: In the private sector, some companies had been given licenses to carry on

generation and distribution activities. While some of these, like BSES Limited, are generation and

distribution companies others, like Surat Electricity, are just distribution companies.

Independent Power Producers: The Independent Power Producers (IPPs) are the companies that have

been given a nod to set up generation capacities.

Finally, a look at the regulatory structure of the sector indicates that various Acts govern the power sector. These

provide for the tariff determination procedure for companies. It also defines the various terms such as reasonable

returns and capital base. However, approvals of tariffs rest with the respective governments.

1.5 NEED OF STUDY

Business depends on society for the needed inputs like men, money, & skills. Business also depends on

society for market where products may be sold to the buyers. Thus Business depends on society for

existence, sustenance & encouragement.

Social Responsibility is understood as the obligation of decision makers to take actions which protect

and improve the welfare of society as a whole along with their own interest.

Every decision the Businessman takes and every action he contemplates have social implications.

8

Social Responsibility of the business is not new to our country. In the oldest days, whenever there was a

famine, the leading businessman of the area would literally throw open their godowns and their treasure

to provide food and other assistance to the needy.

Even in ordinary times it was businessman who looked after the welfare of destitute, the goshalas, wells

and ponds wherever water was difficult to get, the pathsalas and so on. So to accept corporate social

responsibility is no more than dedicating ourselves to the cherished values of our ancestors in the field of

business.

NTPC’s integrated approach towards Corporate Social Responsibility

For achieving its vision –

“To be one of the world’s largest and best power utilities, powering India’s growth”,

NTPC mission statement about CSR states –

“Be a socially responsible corporate entity with thrust on environment protection, ash utilization, community

development, and energy conservation”.

NTPC’s approach towards CSR has also been articulated in the corporate objectives on sustainable power

development as stated below:

To contribute to sustainable power development by discharging corporate social responsibilities.

To lead the sector in the areas of resettlement and rehabilitation and environment protection including

effective ash-utilization, peripheral development and energy conservation practices.”

1.6 OBJECTIVE OF STUDY

Primary objective:

To know overall understanding by people about CSR Activities of NTPC.

9

Secondary objectives:

To measure the perceived benefit of CSR Activities of NTPC.

To measure the felt benefit of CSR Activities of NTPC.

To measure the actual benefit of CSR Activities of NTPC.

To measure the overall rating of NTPC RIHAND as Socially Responsible Organization.

1.7 SCOPE OF STUDY

The scope mainly covers the following:

The study mainly covers all stake holders of NTPC Rihand.

The study covers community/ society/ villagers near NTPC Rihand.

The study covers sample of villagers from two villages (Bijpur & Piparhar), (i.e. 30 villagers from each

village, total 60 villagers).

The need for this study of people understanding about CSR Activities of NTPC Rihand is to measure

people knowledge about these activities. And to see who well they can be benefitted from them.

10

CHAPTER 2

REVIEW OF LITERATURE

2.1 CORPORATE SOCIAL RESPONSIBILITY

What is CSR?

The entirety of CSR can be discerned from the three words contained within its title phrase: ‘corporate,’ ‘social,’

and ‘responsibility.’ Therefore, in broad terms, CSR covers the responsibilities corporations (or other for-profit

organizations) have to the societies within which they are based and operate.

More specifically, CSR involves a business identifying its stakeholder groups and incorporating their needs and

values within the strategic and day-to-day decision-making process.

Therefore, a business’ ‘society’ within which it operates, which defines the number of stakeholders to which the

organization has a ‘responsibility,’ may be broad or narrow depending on the industry in which the firm operates

and its perspective.

Definitions of CSR:

The notion of companies looking beyond profits to their role in society is generally termed Corporate Social

Responsibility (CSR). It refers to a company linking itself with ethical values, transparency, employee relations,

compliance with legal requirements and overall respect for the communities in which they operate. It goes

beyond the occasional community service action, however, as CSR is a Corporate philosophy that drives

Strategic decision-making, partner selection, hiring practices and, ultimately, brand development.

South China Morning Post, 2002

The Social Responsibility of business encompasses the economic, legal, ethical, and discretionary expectations

that society has of organizations at a given point in time .CSR is about businesses and other organizations going

beyond the legal obligations to manage the impact they have on the environment and society. In particular, this

could include how organizations interact with their employees, suppliers, customers and the communities in

which they operate, as well as the extent they attempt to protect the environment.

11

The Institute of Directors, UK, 2002

CSR is a means of analyzing the inter-dependent relationships that exist between businesses and economic

systems, and the communities within which they are based. CSR is a means of discussing the extent of any

obligations a business has to its immediate society; a way of proposing policy ideas on how those obligations

can be met; as well as a tool by which the benefits to a business for meeting those obligations can be identified.

The origins of CSR

The history of CSR is almost as long as that of companies. Concerns about the excesses of the East India

Company were commonly expressed in the seventeenth century. There has been a tradition of benevolent

capitalism in the UK for over 150 Years. Quakers, such as Barclays and Cadbury, as well as socialists, such as

Engel’s and Morris, experimented with socially responsible and values-based forms of business. And Victorian

philanthropy could be said to be responsible for considerable portions of the urban landscape of older town

centre today. In terms of activism aimed at companies perceived as acting against the general interest:

The first large-scale consumer boycott? England in the 1790s over slave-harvested sugar. (It succeeded in

forcing the importer to switch to free-labour sources). In 1612, English jurist Edward Coke complained that

corporations “cannot commit treason, nor be outlawed or excommunicated, for they have no souls.”

Arguments underpinning CSR

Arguments offered in favors of CSR can be broadly split into two camps—moral and economic.

A moral argument for CSR

While recognizing that profits are necessary for any business entity to exist, all groups in society should strive to

add value and make life better. Businesses rely on the society within which they operate and could not exist or

prosper in isolation. They need the infrastructure that society provides, its source of employees, not to mention

its consumer base. CSR is recognition of that inter-dependence and a means of delivering on that obligation, to

the mutual benefit of businesses and the societies within which they are based: CSR broadly represents the

relationship between a company and the wider community within which the company operates. It is recognition

on the part of the business that ‘for profit’ entities do not exist in a vacuum, and that a large part of any success

they enjoy is as much due to the context in which they operate as factors internal to the company alone.

Charles Handy makes a convincing and logical argument for the purpose of a business laying beyond the goals

of maximizing profit and satisfying shareholders above all other stakeholders in an organization:

12

The purposes of a business….is not to make a profit, full stop. It is to make a profit so that the business can do

something more or better. That “something” becomes the real justification for the business….It is a moral issue.

To mistake the means for the end is to be turned in on oneself, which Saint Augustine called one of the greatest

sins….It is salutary to ask about any organization, “If it did not exist, would we invent it?” “Only if it could do

something better or more useful than anyone else” would have to be the answer, and profit would be the means

to that larger end.

Advocates of CSR believe that, in general, the goal of any economic system should be to further the general

social welfare. In advanced economies, the purpose of business should extend beyond the maximization of

efficiency and profit. Increasingly, society expects businesses to have an obligation to the society in which they

are located, to the people they employ, and their customers, beyond their traditional bottom-line and narrow

shareholder concerns. At a minimum, businesses operating in a community benefit from the infrastructure of that

community (tangible, practical elements such as the roads, other transport infrastructure, the police, fire-fighters,

etc) as well as more intangible benefits, such as a safe or clean environment.

But, in most cases, businesses also draw their most important resource, its employees, largely from the local

community. Any business will be more successful if it employs a well-educated workforce that can attend good

hospitals if they become sick, and who have grown up in a positive environment. This is not to mention

consumers, also often members of the local community, without whom no business could survive. CSR

advocates point out that no organization exists in isolation. They believe that businesses, without exception, have

an obligation to on tribute as well as draw from the community, on which they rely so heavily.

An economic argument for CSR

An economic argument in favor of CSR can also be made. It is an argument of economic self-interest—that there

are very real economic benefits to businesses pursuing a CSR strategy—and is designed to persuade those

business managers who are not persuaded by the moral case. Proponents of this argument believe that CSR

represents a holistic approach to business.

Therefore, an effective CSR policy will infuse all aspects of operations. They believe the actions corporations

take today to incorporate CSR throughout the organization represent a real point of differentiation and

competitive market advantage on which future success can hinge: CSR is an argument of economic self-interest

for a business. In today’s brand-driven markets, CSR is a means of matching corporate operations with

stakeholder values and demands, at a time when these parameters can change rapidly. One example is a

company’s customers: CSR adds value because it allows companies to better reflect the values of this important

constituent base that the company aims to serve.

13

What business areas does CSR cover?

CSR covers all aspects of a business’ day-to-day operations. Everything an organization does in some way

interacts with one or more of its stakeholder groups, and companies today need to

Build a watertight brand with respect to all stakeholders. Whether as an employer, producer, buyer, supplier, or

investment, the attractiveness and success of a company today is directly linked to the strength of its brand. CSR

affects all aspects of all operations within a corporation because of the need to consider the needs of all

constituent groups. Each area builds on all the others to create a composite of the corporation (its brand) in the

eyes of all stakeholder groups.

• Corporate governance

Transparency is the key to encouraging trust in the managers selected to run a company on behalf of the

shareholders. It is also vital to maintaining confidence within other stakeholder

Group and the general public. The issues of accurate financial statements, executive compensation, and

independent oversight, have become particularly sensitive and important for

• Patriotism

An issue such as ‘patriotism’ is by definition subjective, but has risen in importance in the U.S. following the

September 11, 2001 terrorist attacks. A good example of an issue that falls into this category is the trend today of

companies attempting to avoid paying corporation tax, some even going to the lengths of incorporating off-shore

(particularly Bermuda), even though company headquarters and the majority of workers are based in the U.S:

According to a recent Harvard University study, U.S. companies avoided paying tax on nearly $300 billion in

income in 1998. … In 1940, companies and individuals each paid about half the federal income tax collected;

now the companies pay 13.7% and

Individuals 86.3%.

• Fair trade

Companies in particular industries have felt pressured to pay a ‘fair’ price for the goods they purchase, over and

above the market-driven price, directly to the producer. This is particularly

The case in many food industries, where world market prices may well have decreased over time, while costs

have either remained the same or increased:

14

Today, with suppliers at small farmer cooperatives in Peru, Mexico, and Sumatra, Green Mountain pays Fair

Trade prices for coffee beans -- not the market price of 24 to 50 cents

Per pound, but a minimum of $1.26 per pound for conventional coffee and $1.41 for organically grown. In 2002,

these Fair Trade purchases represented 8 percent of sales.

Green Mountain also has a “farm direct” program that cuts out middlemen to deliver higher prices to farmers.

Roughly a quarter of its coffee purchases are farm direct.

• Diversity

The 2000 Census data has revealed that the ethnic make-up of the U.S. is changing rapidly. Organizations need

to adapt their traditional structures and mind-sets, which prevent companies

From marketing products effectively to significant segments within the market:

Latinos are now the largest minority in the U.S., making up 13 percent of the overall U.S. population—a 58

percent increase from 1990. As black, Asian, and Pacific Islander populations also experience strong growth

rates, whites are steadily heading toward minority status. Already in California, New Mexico, Hawaii and the

District of Columbia, the majority of residents are non-white. That’s also true in 48 of the nation’s 100 largest

cities.

CSR & corporate brands

Brands today are one of the key focal points of corporate success. Companies try to establish popular brands in

consumer minds because it increases leverage, which is directly reflected in sales and revenue. All aspects of a

company’s operations today feed into helping build the corporate brand. Crucial is how a brand is perceived by

all stakeholders.

Three benefits in particular indicate the positive value for a company in striving to remain in tune with the

community within which it is based by implementing a strong CSR policy:

• Positive marketing/brand-building – BP

BP, with a $200 million re-branding exercise, has effectively re-positioned itself as the most environmentally

sound and socially responsible of the extraction companies. The company stands in stark contrast today with

Exxon Mobil that faces on-going NGO

(Non-Governmental Organization) attacks, consumer boycotts, and activist-led litigation because of its decision

to fight the environmental movement, and its failure to recognize

15

• Brand insurance – NIKE

NIKE has emerged as one of the most progressive global corporations in terms of CSR because it has learned

from its past mistakes and attacks by NGOs. As one of the first corporations to have a Vice-President for

Corporate Responsibility and to publish an annual CSR Report, the company has done a lot to mitigate public

opinion, establish its

Brand as representative of a much more committed corporate citizen, and ‘insure’ itself against any repeat of the

consumer boycotts it faced in the mid-1990s.

• Crisis management – Johnson & Johnson

Johnson & Johnson’s transparent handling of the crisis facing its Tylenol brand in 1982 is widely heralded as the

model case in the area of crisis management. J&J went far and above what had previously been expected of

corporations in such situations, instigating a $100 million re-call of 31 million bottles of the drug following a

suspected poisoning/product tampering incident. In acting in the way it did, J&J saved the Tylenol

Brand, enabling it to remain a strong revenue earner for the company to this day.

Given the large amount of time, money and effort companies invest in their brands; a good CSR policy is an

effective means of protecting that investment and maximizing its impact.

Why is CSR important?

CSR is an important business strategy because, wherever possible, consumers want to buy products from

companies they trust; suppliers want to form business partnerships with companies they can rely on; employees

want to work for companies they respect; and NGOs, increasingly, want to work together with companies

seeking feasible solutions and innovations in areas of common concern. Satisfying each of these stakeholder

groups allows companies to maximize their commitment to another important stakeholder group—their

investors, who benefit most when the needs of these other stakeholder groups are being met:

I honestly believe that the winning companies of this century will be those who prove with their actions that they

can be profitable and increase social value—companies that

both do well and do good….Increasingly, shareowners, customers, partners and employees are going to vote

with their feet—rewarding those companies that fuel Social change through business. This is simply the new

reality of business—one that we should and must embrace.

16

The businesses most likely to succeed in the globalizing world will be those best able to combine the often

conflicting interests of its multiple stakeholders, and incorporate a wider spectrum of

opinions and values within the decision-making process and objectives of the organization. Lifestyle brand firms,

in particular, need to live the ideals they convey to their consumers:

The 21st century will be the century of the social sector organization. The more economy, money, and

information become global, the more community will matter.

Why is CSR relevant today?

CSR as a strategy is becoming increasingly important for businesses today because of three identifiable trends:

• Changing social expectations

Consumers and society in general expect more from the companies whose products they buy. This sense has

increased in the light of recent corporate scandals, which reduced public trust of corporations, and reduced public

confidence in the ability of regulatory bodies and organizations to control corporate excess.

• Increasing affluence

This is true within developed nations, but also in comparison to developing nations. Affluent consumers can

afford to pick and choose the products they buy. A society in need of work and inward investment is less likely

to enforce strict regulations and penalize organizations that might take their business and money elsewhere.

• Globalization

The growing influence of the media sees any ‘mistakes’ by companies brought immediately to the attention of

the public. In addition, the Internet fuels communication among like-minded groups and consumers—

empowering them to spread their message, while giving them the means to co-ordinate collective action (i.e. a

product boycott).

These three trends combine with the growing importance of brands and brand value to corporate success

(particularly lifestyle brands) to produce a shift in the relationship between corporation and consumer, in

particular, and between corporation and all stakeholder groups, in general.

The result of this mix is that consumers today are better informed and feel more empowered to put their beliefs

into action. From the corporate point of view, the market parameters within which companies must operate are

increasingly being shaped by bottom-up, grassroots campaigns. NGOs and consumer activists are feeding, and

often driving, this changing relationship between consumer and company.

17

CSR is particularly important within a globalizing world because of the way brands are built—on perceptions,

ideals and concepts that usually appeal to higher values. CSR is a means of matching corporate operations with

stakeholder values and demands, at a time when these values and demands are constantly evolving.

CSR can therefore best be described as a total approach to business. CSR creeps into all aspects of operations.

Like quality, it is something that you know when you see it. It is something that businesses today should be

genuinely and wholeheartedly committed to. The dangers of ignoring CSR are too dangerous when it is

remembered how important brands are to overall company value; how difficult it is to build brand strength; yet

how easy it can be to lose brand dominance.

CSR is, therefore, also something that a company should try and get right in implementation.

CSR Implementation

Social obligation has two facets- 1) to whom the business is accountable and 2) the business

responsibility to society.

The 1st relate to the accountability of business to its owner, employees, government and consumer.

This accountability or responsibility – Corporate Accountability

Corporate Accountability towards

Employees-

Responsibility towards employees is in the form of just selection, training, promotion, and fair wages

leveling out variation in employment, comfortable working conditions, safety and health, social measures,

scope for initiation, and advancement, participative management, workers education and like.

Consumer

It includes producing and supplying quality goods at reasonable price, avoiding caution of artificial

scarcities, revealing truth in advertisement and labels, keeping us the delivery schedules, providing prompt

after sales services, preventi9ng formation of monopolies with the intention of exploiting customers, and

guaranteeing the base about the life time performance and products.

Government

It includes responsibility complying with all legal requirements, paying taxes honestly, executing

government contracts, and making services of executives available for government, deducting income tax

and amount to be invested in national saving certificate (NSC) from wages and salaries of employees and

acting as a willing partner with government in pursuit of public welfare.

18

Owners

Corporate accountability towards owners includes areas such as managing the business profitably, ensuring

fare and regular return on capital employed, guaranteeing capital appreciation and consolidating financial

position of the business so that it can withstand fluctuating fortunes so common in business.

Common Characteristics of Socially Responsible Firms

Initially founded by far sited people who visibly set the firms’ moral tone.

Stuck to the basics and produce only high quality goods and services for specific market niches.

Develop the public image that emphasize their commitment to quality and often used non-traditional

means to promote it.

Firmly practiced, the dual principals of self management and decentralization.

Brought in outside people to provide needed talent

Encouraged all employees to become part of the shared mission through full worker participation in

decision.

Offered donation in cash or services to people in need of help.

Constantly look at the future but always pay attention to the past.

2.2 CSR ACTIVITIES BY NTPC Ltd., RIHAND NAGAR

Background

NTPC Rihand being isolated place. The topographically and geographically area of NTPC Rihand and

surrounding are hilly, rocky, undulated and covered with vegetation and soil fertility index is also very low.. The

populations of surrounding are also very poor and scattered in thinly populated hamlets. There are illiteracy, lack

of health infrastructure, transport facilities and other basic amenities. Moreover, our power station is situated in

Distt. SoneBhadra (UP) but our MGR railway track is passing through sixteen villages of Tehsil Singraulli, Distt.

Siddhi (MP). Accordingly, we have to carry out CSR-CD activities in both the states i.e. UP and MP area.

RESETTLEMENT & REHABILITATION POLICY OF RIHAND:

• NTPC was the first PSU to have a comprehensive R&R policy for its projects in May 1993 and since

then it is under implementation. Over the years NTPC went through a phase of gaining experiences and

learning's in dealing with R&R issues and thereafter finalized the NTPC R&R Policy 2005 which is on

higher norms with the National Policy on R&R (NPRR – 2003) of the Govt. of India.

19

• The basic principle and strategy adopted in this policy is to avoid acquisition of agricultural land and

homestead to the extent possible and assist the affected persons to improve or at least regain their

previous standard of living.

• As compared to previous policy 1993, this policy has the emphasis on LFL (Land for Land) option of

rehabilitation. Provision of one time RG (Rehabilitation Grant) for rehabilitation and resettlement has

been provided; the detail remains as per the RAP (Rehabilitation Action Plan) of the respective project.

• RAP budget will be part of the capital budget of the project.

Facilities

The following economic opportunities include preference to affected persons in the project and township areas

both:

1. Employment with contracting agencies.

2. Allotment of shops / kiosks.

3. Award of petty contracts.

4. Vehicle hiring.

5. PCO / Internet kiosk.

6. Newspaper vending.

7. Vendor permit.

8. Courier service.

9. Any other opportunity

EDUCATION

“INTELLIGENCE PLUS CHARACTER-IS THE GOAL OF TRUE EDUCATION”

Although there are 4800 number of students enrolled in 11 Schools managed by E-VOICEs namely Chetna,

Malviya Mission, Diamond Club, Vartika Mahila Mandal, Gram Panchayat Bijpur, Dodahar and Sirsotti. The

schools are being managed successfully as we have provided required infrastructure for the schools and

honorarium for teachers through E-Voices and Gram Panchayat. But there is lot to be done for improving

education facilities e.g. there are no govt. aided schools in the surrounding area. The students of Board

examination like Class 10th and 12th including girl students used to go 80 to 90 Km to appear in Board exams.

Moreover, local people are demanding for construction of Inter College in vicinity of project, so that education

level of school going children may be improved. Although , we are in touch with UP State Education

Department to take over the schools together with infrastructure facilities established by NTPC, but they will

20

take the schools as per their norms. The construction Of Inter College/ schools with infrastructure like ground,

boundary walls etc. will be conducive for improving our public image in surrounding areas.

Health

“HEALTH AND CHEERFULNESS NARURALLY BEGET EACH OTHER”

There are Malaria, Tuberculosis, leprosy and other communicable disease prevalent in nearby areas. There are

327 number of PCP (Physically Challenged Persons) n vicinity of power station as per our survey. Although our

hospital is helping the local PHC ( Primary Health Centre) for providing medical assistance for national health

programmes We are also providing medical facilities to vulnerable patients but medical assistance needs to be

extended to all landoustees both in UP and MP areas and liberal view may be taken as per our site requirement

Infrastructure facilities

“MAN IS WHAT HE EATS & WHERE HE LIVES”

Though we have created infrastructure facilities particularly wells, bore wells, hand pumps etc. for potable water

supply. In addition Panchayat Bhawan, school buildings, Sulabh Sochalya , Road network, drains , power supply

have also been provided in rehabilitation colonies –I, II, III.

Although we handed over rehabilitation colonies to SSADA for maintenance and they have also taken up some

jobs like restoring the street light, water supply through pumps and renovation and maintenance of internal road

network but recently we have received the following communication from SSADA and we have to take

decision on merit basis:-

SSADA has informed us that NTPC will provide water at their tank and SSADA will take

responsibility of water supply network in rehabilitation colonies. SSADA will also examine the

possibility of waving of watercess for water supply in rehabilitation areas if any.

Power supply in rehabilitation colonies: We have received letter from Gram Pradhans duly

forwarded by Distt. Magistrate SoneBhadra and Executive Engineer UP Power Corporation for

supply of power in rehabilitation colonies and Bijpur market. As there is no power supply

network by UP Power Corporation in these areas .Since we have got license for distribution of

power supply, we may extend this facility in left over area also.

Since there is wastage of rain water in surrounding areas, we have to take up some initiatives

like rain water harvesting project for enhancing irrigation potential and water for vet nary

animals.

21

We have also installed one Solar power project at Village Jarha –Chetwa and a Bio-mass project

at village Piprahar but installation of hydel power project from our discharge channel could be

conducive to cater the need of power supply in nearby areas.

Since we have to acquire about 500 acre of land in Jheelo- Parvatva and Jheelo -Khamariya for

ash disposal, we have to take CSR-CD activities in surrounding areas for gaining the confidence

of local people.

NTPC Rihand Trust: In our opinion, a NTPC Rihand CSR Trust may be constituted and may be

affiliated with NTPC foundation for getting funds for miscellaneous CSR infrastructure facilities

together with rural development works.

VOCATIONAL TRAINING

“ALL PROGRESS IS BASED ON THE UNIVERSAL & INNATE DESIRE OF ALL ORGANISMS TO LIVE

BEYOND THEIR INCOME”

The CSR-CD policy of Rihand intends to facilitate the unemployed people in and around the project, in self-

employment through co-operatives/self-help groups. The program may include provision for the enabling

mechanism such as backward linkage like tying up the input resource & forward linkage like marketing etc.

The training program in Rihand includes:-

Masala making

Atta chakki.

INITIATIVE FOR DISABLED

“CHALLENGES MAKES LIFE INTERESTING, OVERCOMING THEM MAKES IT MEANINGFUL”

The CSR-CD policy of Rihand intends to undertake community development in the neighborhood area of

operation station with particular focus on disabled persons. it also facilitate the disabled persons in improving the

economic condition by giving employment opportunities.

Objective

Many governmental, non-governmental and voluntary agencies are working for the Cause of PCPs and are

empowering them through provision of formal education and Vocational training. However, even after getting so

empowered, there is serious dearth of Sustainable economic and employment opportunities. NTPC has proposed

to enable such Empowered and capable PCPs to become economically self reliant through supporting specific

22

targeted schemes. These schemes will focus on creating employment opportunity for PCPs. In case of group /

cooperative, the scheme may focus on sustainable self-employment and income generating schemes.

2.3 NTPC’s MEMBER SHIP TO DIFFERENT CSR-GROUP

Global Compact

In order to promote Corporate Social Responsibility and citizenship in the new global marketplace, UN Secretary

General, Mr. Kofi Annan first proposed the Global Compact at Davison Jan'99. It was thus created to help

organizations redefine their srategies and course of actions so that all people can share the benefits of

globalization, not just a fortunate few.

The Global Compact’s operational phase was launched at UN Headquarters in New York on 26 July 2000.and

has since then focused its efforts on achieving practical results and fostering the engagement of business leaders

in the direction.

Through the power of collective action, the Global Compact seeks to promote responsible corporate citizenship

so that business can be part of the solution to the challenges of globalization. In this way, the private sector – in

partnership with other social actors – can help realize the Secretary-General’s vision: a more sustainable and

inclusive global economy.

Participation by NTPC

Due to keenness of UN that this movement takes root in India, some business leaders took the initiative and

organized a meeting of select business leaders in Mumbai in Dec' 2000. NTPC as a prominent business and

community leader in the power sector was also invited to the meeting and thus engage/associate itself with

Global Compact.

Following this meeting which was attended by CMD NTPC, NTPC agreed to be associated with the Global

Compact. In his letter in May 2001 CMD addressed to Mr. Kofi Annan, Secretary General, UN formally

expressed its support for the Global Compact and its commitment to take action in this regard.

NTPC expresses its continued support for the Global Compact and its commitment to take action in this regard.

The principles of GC are regularly communicated to all employees’ through in-house magazines, internal

training programmes and posters.

23

NTPC along with major corporate in India took the lead and founded Global Compact Society of India in the

year 2003. Further, NTPC’s founder member of Global Compact Society took the lead for organizing the

1stnational convention on “Excellence in Corporate Citizenship and Global Compact” on 27th July 2004 at New

Delhi.

NTPC Foundation

NTPC foundation has been registered on December 10 , 2004. The foundation has been formed for addressing

the niche domains of social development at National level with special focus for physically challenged persons.

The foundation seeks to facilitate the entrepreneurs/ communities in formulating project proposals and

establishing the feasibility for promoting the decentralized distributed generation and supply of power for

meeting the power and development requirement of remote and far flung places.

NTPC foundation also proposes to establish a National Resource and Development Centre for physically

challenged persons. It aims to facilitate micro financing; providing of requisite support in the initial phase of

identification of livelihood opportunities for physically challenged people till self sustenance is achieved. It also

plans to conduct advocacy and awareness programmes for generation of employment opportunities, to provide

need based vocational training to persons with disabilities. It proposes to cover the following categories of

Disabilities:

Visually Challenged Persons

Deaf and Dumb Persons

Physically Challenged Persons

Mentally Challenged Persons with mild intensity.

The foundation under its umbrella will be initiating and carrying out income generation schemes for physically

challenged persons basically with the aim to create sustainable self employment opportunities and skills so that

they can become economically self reliant The category of physically challenged persons for these schemes

include the visually impaired and the hearing impaired persons only.

India Partnership Forum

The India Partnership Forum (IPF) is a joint initiative of UNDP India and the Confederation of Indian Industry

which seeks to promote multi-stakeholder dialogue on Corporate Social Responsibility issues and a common

understanding of good corporate citizenship particularly through evolution of a common code. The Forum also

seeks to promote and pilot new and innovative initiatives in corporate partnership for development. A multi-

24

disciplinary Governing Board guides the Forum launched by the UNDP Administrator along with the President,

CII in February 2001 at New Delhi. A key development accompanying the launch of the Forum was adoption of

the Social Code for Business.

The main objectives of the India Partnership Forum are to:

Build a 'shared social vision' on the role and responsibilities of business in development; provide a platform to

facilitate multi-stakeholder (business, civil society organizations, Government and International Organizations)

dialogue on various issues pertaining to CSR including policy issues with regard to creation of an enabling

environment; Build 'social capital' and promote conceptualization and implementation of business civil society

partnership initiatives with the least advantaged groups, and; Institutionalize UN interaction with the private

sector

India Partnership Forum: Focus Areas

Adoption and Operationalisation of Social Code

Formulation of Corporate Social Policy

Support to public policy measures on CSR

Mainstreaming CSR education in Business Schools

Capacity Building for Community Development

Capacity Building on Sustainable Reporting Processes and Indices

Building Knowledge Base on CSR

Thematic partnerships under the UNDP

25

2.4 Stakeholder Engagement

NTPC has always encouraged belief in democratic and Participatory practices in all its development initiatives.

People’s participation is one of the most important aspects of building strong and self independent communities.

‘Stakeholders must have an equal share in development’, this is the driving force behind all the community

development initiatives at NTPC. Such initiatives include

Need Assessment Survey: One major area of community participation is through Need Assessment Survey. It is

carried out for the communities in the neighborhood of NTPC stations from time to time. The aim is to correctly

identify the developmental needs of the community with their involvement and come up with a plan of

intervention for them. It is a proper structured format which comprehensively describes the different needs of the

community people. It also brings into light those needs which are not so commonly perceived or can be missed.

The Village development Advisory Committee (VDAC):The Village development Committee exists at all the

stations of NTPC. This comprises of representatives from the district administration, local authorities, Panchayat,

NGOs, local communities and the NTPC. The Need Assessment survey serves as a basis for making

developmental plans and the activities are then prioritized in consultation with theVDAC. Thus this committee is

closely involved in the planning and implementation of the developmental initiatives.

Employee Volunteering

Volunteering by the employee and their family members is a regular feature at NTPC. It believes that every

employee has the capacity to contribute towards society. Since the concept of CSR is very dynamic and

constantly involving, new ideas from the employees come as a breeze of fresh air and contribute a lot towards

various initiatives.

At all the project sites of NTPC the employees are encouraged to form Voluntary Organizations referred to as

‘EVOICE’ (Employee Voluntary Organizations for Initiatives in Community Development). There are 25 such

organizations in 20 stations. They carry out a lot of development activities in the villages that surround the

project sites. It provides with ample opportunities for Volunteering by the employees. These organizations are

very active at all the project sites and carry out various activities like awareness programmes on various issues

like HIV –Aids, nutritional awareness, promotion of rural sports, providing scholarships, advocacy etc.

Inauguration of Family Planning Camp by members of EVOICE

The family members of the NTPC employees also contribute actively in the developmental initiatives at plant

sites. ‘LADIES CLUB’ is an established feature at all the project sites which comprises of the family members

of the employees at project sites.

26

The club carries out activities like Distribution of Wheelchairs to physically challenged people, distributing

blankets to needy people, distributing things like food packets, umbrellas etc to people of other backward

classes. Books, stationery items etc are distributed to schools on a regular basis. Education Centre at some

stations are being run by the Ladies Club. Active involvement of ladies club in developmental activities is an

important feature in NTPC.

27

CHAPTER3

3.1 RESEARCHMETHOLOGY

A Survey was conducted among the people of two villages (Bijpur & Piparhar), through a structured

Questionnaire named “NTPC RIHAND KE BARE MEIN SAMAJIC BODH SARVEKSHAN”. The survey

questionnaires were administered on 60 villagers of two villages near the project with varying distances.

3.2 TOOLS FOR DATA COLLECTION

A structured questionnaire of 21 items was used, which was generated and validated by SEWA, an NGO

working closely with NTPC RIHAND, for development of the area.

Name of the questionnaire was “NTPC RIHAND KE BARE MEIN SAMAJIC BODH SARVEKSHAN”.

The rating was on five point basis:

a) Poor = 1;

b) Average = 2;

c) Good = 3;

d) Very Good = 4;

e) Excellent =5.

Division of question on basis of objectives

Perceived level of benefit is measured by questions numbered – 6, 8, 10, 11, 14, 17 and 18.

Felt level of benefit is measured by questions numbered – 1, 2, 3, 4, 15, 16 and 19.

Actual level of benefit is measured by questions numbered – 5, 7, 9, 12, 13 and 20.

Overall rating of the organization by question number 21.

3.3 SAMPLING

Random sampling method was used.

Demography: people of all age were selected on random basis. It was ensured that respondent is aware about

the NTPC RIHAND, and must also be able to read and write (literate).

28

3.4 PROCEDURE

1. A specifically structured questionnaire was filled in by the researcher with consultation of the

respondent. The respondent were well communicated the meaning of each of the 21 questions of the

questionnaire named “NTPC RIHAND KE BARE MEIN SAMAJIC BODH SARVEKSHAN”.

2. Only responses, of those respondents were included for the purpose of data analysis and conclusion, who

were having knowledge about NTPC RIHAND, and it’s CSR Activities.

3.5 DATA SOURCES

Data in the study is of two types:

Primary data: the data collected from villagers through the questionnaire.

Secondary data: the data collected from :

Magazines

Official records of NTPC RIHAND

3.6 DATA TABULATION AND ANALYSIS

Master table of frequency distribution was prepared and then was divided into fractions according to

objectives.

Simple percentage frequency distribution pie-chart was drawn, and conclusions were drawn.

For convenience five point scale was restructured in two point scale.

Negative: a combined pool of poor & average.

Positive: a combined pool of good, very good & excellent.

CHAPTER 4

29

RESULT

4.1.1. OBJEVTIVE: To measure the felt benefit of CSR Activities of NTPC.

CHART 4.1.1

RESULT: Most of the respondents perceive that NTPC RIHAND is socially responsible firm. About 13.10% responses were poor & 23.57% were average (in negative). Were as in positive group, 31.90% were good, 22.62% were very good, and 8.81% were excellent.

CHART 4.1.2

RESULT: It is clearly visible that in negative response Piprahar have more than Bijpur. But in positive response Bijpur is having higher value than Piprahar, in percents. Thus we can see that there is significant difference in perceived level of CSR Activities of NTPC RIHAND in near and far villages.

4.2 OBJECTIVE2 : To measure the felt benefit of CSR Activities of NTPC.

30

NEGATIVE37%

POSITIVE63%

WHOLE SAMPLE

NEGATIVE POSITIVE0.0010.0020.0030.0040.0050.0060.0070.0080.00

29.05

70.95

44.29

55.71

BIJPUR PIPARAHAR

CHART 4.2.1

RESULT: 68% of respondent are feeling improvement in their living standard as a result of NTPC RIHAND’s

CSR Activities. Only 13.33% (poor) and 18.75%(average) responses were negative. Were as, in positive

response were 36.25% (good), 24.58% (very good), 7.08% (average).

CHART 4.2.2

RESULT: It is clearly visible that in negative response Piprahar have more than Bijpur. But in positive response Bijpur is having higher value than Piprahar, in percents. Thus we can see that there is significant difference in perceived level of CSR Activities of NTPC RIHAND in near and far villages.

4.3 OBJECTIVE 3: To measure the actual benefit of CSR Activities of NTPC.

31

NEGATIVE32%

POSITIVE68%

WHOLE SAMPLE

NEGATIVE POSITIVE0.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

COMAPARATIVE STUDY OF VILLAGES

BIJPIR PIPRAHAR

PERCENT

CHART 4.3.1

WHOLE SAMPLE

NEGATIVE37%

POSITIVE63%

RESULT: Most of respondent accept that their standard of living has been elevated due to CSR Activities of NTPC RIHAND. 63% positive (30.83% good,26.11% very good,&6.11% excellent) responses were obtained, where only 37% negative ( 15.28% poor,& 21.67%) responses were also obtained.

CHART 4.1.2

RESULT: The standard of living of people of Bijpur has actually improved due to CSR Activities of NTPC

RIHAND. The significance difference between responses of two villages at distance ,does exist.

4.4 OBJECTIVE4 : Tomeasure the overall rating of NTPC RIHAND as Socially Responsible

Organization.

32

1 20.00

10.00

20.00

30.00

40.00

50.00

60.00

70.00

COMAPARETIVE STUDY OF VILLAGES

BIJPUR PIARAHAR

CHART 4.4.1

RESULT: Majority of respondent view NTPC RIHAND as socially responsible firm. Total 58% responded that

the organization is socially responsible, only 42% responded it as not working for society.

CHART 4.4.2

RESULT: More people see NTPC RIHAND, as socially responsible firm, in Bijpur as compared to respondents

of Piprahar.

33

NEGATIVE42%

POSITIVE58%

WHOLE SAMPLE

NEGATIVE POSITIVE0.00

5.00

10.00

15.00

20.00

COMPARATIVE STUDY OF VILLAGES

BIJPUR PIPRAHAR

RESPONSES

PERCENT

CHAPER 5

CONCLUSION

The villagers have benefited through additional means of livelihood

There have a high level of knowledge about NTPC RIHAND’s CSR Activities, in the society around it.

Level of perception is high, in particular Bijpur, a nearby village (only 1k.m.) ,rather in Piprahar, a far

away village, (7 k.m. from NTPC RIHAND).

Level of felt benefit is high , in particular Bijpur, a nearby village (only 1k.m.) ,rather in Piprahar, a far

away village, (7 k.m. from NTPC RIHAND).

Benefit provided by NTPC RIHAND is actually high , in particular Bijpur, a nearby village (only 1k.m.)

,rather in Piprahar, a far away village, (7 k.m. from NTPC RIHAND).

34

CHAPTER 6

Bibliography

BOOKS

Francis C : Business Environment Aswathappa K. : Essentials of Business Environment Datt R. & Sundharam K.P.M. : Indian Economy Adhikary M. : Economics Environment of Business

Internet

Web-site of NTPC Ltd.

Googel.com

Wikipidia.org

\

CHATER 7

35