Corporate Social Responsibility in India

The concept of CSR is not new for India. It has its footprints in ancient India when CSR was known as social duty or charity. The concept got a more formal prominence during nineties when companies started integrating sustainability concerns into their business goals. This was also a period when Government of India initiated many reforms to liberalize and de-regulate the Indian economy and to integrate it with the global market. These reforms helped Indian economy to grow in many sectors; but soon it was realized that this growth was not all inclusive growth. Despite a booming economy, India performed poorly on many social indicators like poverty, sanitation, employment, health, education, environmental protections etc. Successive governments failed to address these social problems and the need was felt to constructively involve private sector in handling these social issues. In 2013, the Government of India gave a fillip to CSR by passing a landmark legislation making it mandatory for specified big corporations to spend a portion of their profits on the CSR activities or to explain the reasons for not doing the same. Section 135 and Schedule VII of the Companies Act, 2013 deal with CSR activities of the companies, making it indirectly compulsory for the companies to spend a specified portion of their profits in the social responsibility areas that come in the ambit of the Act. Now the drive for CSR has started coming from regulatory directives. This paper aims to examine the impact of current legislative changes on the CSR practices of large corporations in India. Empirical works in the area for past 10 years (2008–2018) have been analyzed to compare CSR practices of the large companies in pre and post 2013 period. Empirical evidences suggest improvement in CSR spend after enactment of Companies Act, 2013. CSR is no longer limited to charity or philanthropy. It is gradually becoming a way of conducting business in a more socially and environmentally responsible manner.