CSR in India

Illusionary CSR- Does it even exist?

CSR (Corporate Social Responsibility) has traveled through various phases in India. Traditionally, the concept of charity was carried out by businesses and philanthropists with strong religious intent. The CSR Initiatives were deeply influenced by family values, traditions, culture and religion. Businesses majorly focused on benefiting the employees and their families, setting up educational, healthcare institutions. However, the CSR is beyond philanthropy or charity.

The concept incorporates strategic philanthropy, shared value, corporate sustainability and business responsibility, at large. It acknowledges the responsibility of the corporates towards communities within which it operates. It also defines the partnership between a business corporation and social action groups in providing financial and other resources to support development plans, especially among disadvantaged communities.

Organisations across the globe are realizing the benefits of adopting socially responsible behavior. The global information dissemination has allowed the Indian Govt. to incorporate the best practices. This  gradually led to India becoming the first country to mandate Corporate Social Responsibility under Schedule VII, Section 135 of the Companies Act 2013. As per rule Companies can spend minimum 2% of their net profit for social development but the law doesn’t restrict them to spend more. After the commencement of the act, a change in the mindset of the corporates can be seen. The companies that were spending more than 2% before the passing of the law have also started to spend less than the required amount.

In the era of growing competition, corporates have started to consider CSR as a reputation builder than a change maker initiative. Many corporates merge their social initiatives with marketing campaigns to look good before their stakeholders and influence the preference of their customers. For instance: beverage companies that are blamed for exploiting the water resources are seen spreading messages that counter such perceptions.

Implementation of a social initiative is the core of any CSR program. An impactful social welfare project is one which has an effective entry and exit plan. It should have a thorough understanding of the ground realities and local aspirations for achieving a sustainable impact on the community. Since some corporations lack genuine efforts or knowledge around on-ground implementation, many CSR initiative fails to bear the real and impactful results. For example youth skilling program without ensuring job placement for them.

CSR in India was mandated with the intention to channelise the investment from the private sector and ensure a broader spectrum of the population including those most in need reap maximum benefit. Though it has achieved some impactful results but due to lack of understanding of the concept and intent of the organisation, it has failed to cover a lot of ground.

The need of the hour is to have strict monitoring of the CSR Law and genuine intention among the corporates to give back to the society beyond compliance. Till then, CSR for the social good of the society is illusionary and Article 135 is an unnecessary compliance burden.

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