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Parikalpana - KIIT Journal of Management (Vol. 15, Dec. 2019)141Corporate Social Responsibility: An Indian PerspectiveRaja SarkarPh.D. ScholarDepartment of Business Administration, Utkal University, Bhubaneswarrajasarkar71@gmail.comDoI: ractBusiness houses cannot consider themselves solely as a money making entity.Being benef iciaries and some of the biggest consumers of various social and naturalresources, it’s their moral and ethical duty to give back to the society in variousforms. Instead of being seen only as charity, corporate social responsibility shouldbe considered as a vital part of the core business of a business entity. Companiesupon realizing this reality have started setting aside substantial portion of theirprof its for various CSR activities and Indian companies are also not an exceptionto it. There are primarily two reasons behind companies becoming more sociallyresponsible- the f irst one being the external reality of a rapidly changing societyand environment which makes it obligatory for business organizations to adoptsustainable development for their own sheer survival, the second one being theinternal reality of business innovation which makes it imperative to practicecorporate social responsibility to become more prof itable. Though a relativelynew concept in India, it has picked up pace in the last decade or so due to bothgovernment prodding and also due to the realization by companies of CSR activitiesas an excellent way to connect with the populace. CSR is not only the variousactivities companies employ to utilize their prof its for various social andenvironmental development, but also consists of the socially responsible methodsto earn these prof its and running a transparent business to realize an overallsocial and environmental sustainability. The present paper will try to explore thevarious aspects of corporate social responsibilities and will also try to assess theroles played by Indian companies in carrying out various types of CSR activities.Key Words: Corporate social responsibility, Social welfare, Sustainability, India,Environmental concernPurpose of study:India has seen an enviable growth invarious industrial sectors in the last fewdecades especially since the economicliberalization of the 90’s. Despite of that,Indian companies have a long way to goto match up to the contribution of itsforeign peers in the f ield of corporatesocial responsibility. Government ofIndia has framed various regulations toidentify diverse activities which couldqualify as acts of CSR and also set variousnorms for the same based on the bottomline of the companies. However, the real

142Parikalpana - KIIT Journal of Managementchallenge always remains the actualimplementation at the ground levelsuccessfully which could determine howf ar the effort put forward by thegovernment has borne fruit. There is aconsiderable shift of corporate goalstowards socio-economic sustainabilityto benef it various stakeholdersassociated with the business. Anelaborate analysis of CSR activities ofIndian companies will throw up variousimportant points. Thus, it is imperativeto consider this exciting relationshipbetween corporate social responsibilityand putting forward an enhanced imageof the businesses in the society.Objectives of study: To understand various rules andregulations governing CSR activitiesin India To analyze various data related to CSRactivities undertaken by companiesto give a clear idea of the status of CSRactivities in India To give out suggestions to improvethe CSR climate in IndiaMethodology:The present study uses secondary datafrom various government and nongovernment sources like Ministry ofCorporate Affairs, PricewaterhouseCoopers, Ernst & Young, KPMG etc andanalyze them to give a clear picture of thecurrent status of CSR activities in India.Corporate social responsibility:Corporate social responsibility is a selfregulating business model which helpsa company to be responsible andaccountable to the society, to itself, toits stakeholders and to the commonpeople. Through the practice of corporatesocial responsibility, companies canbecome conscious of the various impactstheir businesses are having on theeconomy, society, and environment.Engaging in corporate socialresponsibility signif ies that the companyis carrying out its business in a mannerwhich is enhancing the society and theenvironment rather than leaving anegative footprint on it.Corporate social responsibility can takediverse forms based on the organizationand industry. Businesses can have apositive inf luence on the societythrough CSR programs, philanthropicactivities, and various other voluntaryworks. It can help forge stronger bondsbetween employers and employeeswhich can boost morale of both of themby creating a special bond between themand the world around them.Corporate social responsibilityregulation in India:According to Section 135 of the IndianCompanies Act, 2013, Corporate SocialResponsibility is required for allcompanies i.e. private limited company,limited company. The followingcompanies are expected to spend 2% ofthe Prof it after tax (PAT) on CSR: Companies with a net worth of Rs.500 crores or greater, or Companies with a turnover of Rs.1000 crores or greater, or Companies with a net prof it of Rs. 5crores or greater.

Corporate Social Responsibility: An Indian Perspective143The average of last three f inancial years’PAT is considered for calculating the 2%of for CSR. These companies arerequired to form a CSR committeeconsisting of its directors. Thiscommittee oversees the entire CSRactivities of the Company. Eradicating extreme hunger andpovertyCSR committee: Improving maternal healthi) As per the Act, eligible companies aremandatedto form CSR committee ofthe board consisting ofthree or moredirectors, out of which at leastonedirector shall be an independentdirector. Combatinghumanimmunodef iciency virus, acquired,immune def iciency syndrome,malaria and other diseasesii) An unlisted public company or aprivate companycovered under subsection (I) of section 135which is notrequired to appoint an independentdirector pursuant to subsection (4)of section 149of the Act, shall haveits CSR committee withoutsuch anindependent director.iii)A private company having only twodirector onits board shall constituteits CSR committee withtwo suchdirector.iv) With respect to a foreign companycovered underthe CSR rules, the CSRcommittee shall compriseof at leasttwo persons of which one personshallbe as specif ied under clause (d)of sub-section (1)of section 380 of theAct and another person shallbenominated by the foreign company. Promotion of education Promoting gender equality andempowering women Reducing child mortality Ensuringsustainabilityenvironmental Employment enhancing vocationalskills, social business projects Contribution to the Prime Minister’sNational Relief Fund or any otherfund set up by the CentralGovernment orthe StateGovernments for socio-economicdevelopment, and Relief and funds for the welfare of theScheduled Castes, the ScheduledTribes, other backward classes,minorities and women and suchother matters as may be prescribed.Role of CSR in an organization: It strengthens relationships withstakeholders It enables continuous improvementand encourage innovationActivities permitted under CorporateSocial Responsibility (CSR) It attracts the best industry talent asa socially responsible companyThe following activities can beperformed by a company to accomplishits CSR obligations: It acts as the additional motivator toemployees

144Parikalpana - KIIT Journal of Management It ushers in risk mitigation becauseof an effective corporate governanceframework It enhances ability to managestakeholder expectationsTotal no. of CSR projects :Total amount spent on CSR:Source: National CSR Data Portal, Ministry ofCorporate Affairs, Government of IndiaSource: National CSR Data Portal, Ministry ofCorporate Affairs, Government of IndiaCSR spent: Development Sector-wise:Source: National CSR Data Portal, Ministry of Corporate Affairs, Government of India

Corporate Social Responsibility: An Indian PerspectiveCSR spent: Top 10 statesSource: National CSR Data Portal, Ministry of Corporate Affairs, Government of IndiaCSR spent: Listed vs. Unlisted companies:Source: National CSR Data Portal, Ministry of Corporate Affairs, Government of India145

146Parikalpana - KIIT Journal of ManagementCSR spent: Govt. vs. other than Govt. companies:Source: National CSR Data Portal, Ministry of Corporate Affairs, Government of IndiaTop 10 companies in India in terms of CSR spending in FY2016-17:Source: National CSR Data Portal, Ministry of Corporate Affairs, Government of India

Corporate Social Responsibility: An Indian Perspective147Amount spent by top 100 listed companies as per market capital on CSRactivities:During FY2016-17, companies have spent Rs. 7215.9 cr. which is 41 per cent higherascompared to 2014-15. This is a signif icant rise,clearly demonstrating higherexpenditure towardsCSR activities from the mandated year.Source:KPMG, India’s CSR Reporting Survey 2017Top 100 listed companies meeting the 2 per cent spending criteria:58 companies havespent 2 per cent or more during FY2016-17,as compared to only32 companies during thef irst year of requirement (2014-15).Source: KPMG, India’s CSR Reporting Survey 2017Industry wise CSR expenditure in FY2016-17:Energy and Power sector has spent the highest amount towards CSR (Rs. 2524.9cr.) followed by BFSI (Rs. 1281 cr.), IT Consulting and Software (Rs. 959 cr.),ConsumerProducts (Rs. 587 cr.), and Mining & Metal (Rs. 566 cr.).Source: KPMG, India’s CSR Reporting Survey 2017

148Parikalpana - KIIT Journal of ManagementCSR expenditure in various areas in FY2016-17:Source: KPMG, India’s CSR Reporting Survey 2017CSR expenditure by top 100 listedcompanies in education:Expenditure towards educationincreasedby over 92 per cent in FY201617 over the previous 3 years i.e. fromRs.1249 crore (FY2014-15) to Rs.2404crore (FY2016-17).Source: KPMG, India’s CSR Reporting Survey 2017CSR expenditure by top 100 listedcompanies in arts and culture:Expenditure towards arts and culturehas increased over three-fold from Rs.49crore in FY2014-15 to Rs.168 crore inFY2016-17.Source: KPMG, India’s CSR Reporting Survey 2017CSR expenditure by top 100 listedcompanies in sports:Expenditure towards sports hasincreased over three-fold from Rs.48crore in FY2014-15 to Rs.133 crore inFY2016-17.Source: KPMG, India’s CSR Reporting Survey 2017