MARCH 2017 : CORPORATE SOCIAL RESPONSIBILITY IN INDIA : LAW AND IMPLEMENTATION CHALLENGES

“Let the rich satisfy the poor implorer and bend his eye on a longer pathway.” 

- RigVeda, Book X, Hymn 117

The act of philanthropy and the concept of D?na are rooted in ancient Indian wisdom that dictates the act of giving to those in distress. The immediate period prior to the implementation of the law marks a shift in the culture of corporate giving from philanthropy to the onus of social responsibility.

The issuance of the Corporate Social Responsibility Voluntary Guidelines in 2009 by the Ministry of Corporate Affairs is followed by government-mandated CSR legislation under Section 135 of the Companies Act 2013. India became the first country to make it mandatory for firms that satisfy certain profitability in size and net worth thresholds to contribute 2% of their net profits to CSR activities and disclose their undertakings in this domain. The article aims to discourse on the law and Notified rules in MCA, 2014(a) and probe prospects and challenges of implementing the mandated CSR in India considering new suggestions for change in early 2017. This leads us to the question of whether the legal framework of the CSR policy Section 135 ensures India Inc’s compliance towards social welfare undertakings.

In an Indian setup where political realities and economic senses are at crossroads, the CSR policy was an attempt to supplement the government’s development agenda in equitably delivering the benefits of social growth by engaging the corporate world. Section 135 of the Companies Act 2013 makes CSR expenditure mandatory for corporates based on set criteria as is summarized in this table below by Ernst and Young.