CORPORATE SOCIAL RESPONSIBILITY

Social Responsibility In Developing Countries

Authors of semester work:

Arun Prasath Kanagaraj Sridevi
Sakthivel Lakshmanan

Date of submission: 02. 11. 2022

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Contents
List of tables..........................................................................................................................

Introduction:.........................................................................................................................

1)Social Responsibility in Developing Countries(INDIA):...............................................

1.1) First Phase(1854-1914):................................................................................................

1.2) Second Phase(1914-1947):............................................................................................

1.3) Third Phase(1947-1980):..............................................................................................

1.4) Fourth Phase(1980-2013):............................................................................................

1.5) Current Phase(2013-Present):.....................................................................................

2)CSR In India after 2013:..................................................................................................

2.1) What is the role of the CSR Committee?....................................................................

3)CSR Spending by Top Companies in India year 2020-2021.........................................

References.............................................................................................................................

List of tables
Table 1: Time period of CSR development in India ..............................................................
Table 2: CSR Spending by top Indian Companies …………………………………7

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Introduction:

Corporate Social responsibility was often referred to as Social Responsibility

than Corporate Social Responsibility for many years, this was the case before the rise of
corporate and business dominance.

The Idea of Social Responsibility had been always presented in Indian Business
philosophies. Religious traditions in India for centuries helped to shape the relationship
between the Privileged and the dispossessed. In India charitable donations to religious
institutions still make up the greatest majority of giving. Early industrialists of the 19th
century established corporate gifting through trusts and endowed institutions run by
members of business families.

Following the First World War, a new era of corporate giving emerged that pulled business
leaders into the struggle for independence. It is commonly known that M.K. Gandhi had
tight contact with influential industrialists. He suggested a business trusteeship model in
which business tycoons should recognize their responsibility as guardians of society's
riches.

The Indian State's role significantly increased in the years immediately following
Independence, while the business sector took a backseat in efforts to advance development.
Dissatisfaction eventually resulted from the State's failures to combat poverty and promote
economic progress. With the liberalization of the Indian economy in 1991, a new era of
globalization and substantial increases in inequality were ushered in.

The growing divide between the richest and poorest Indians encouraged new approaches in
the corporate sector's attempts to solve social issues. Additionally, it made the State
consider how to enlist the help of the thriving business community. The panorama of
Indian CSR is fascinating in light of a contracting State, a more globalized economy, and
significant gaps between the commercial and social spheres.

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1) Social Responsibility in Developing Countries(INDIA):

Although the concept of corporate social responsibility has deep and broad historical roots,
it is mostly a product of the 20th century, particularly from the early 1950s to the present.
Despite its recent expansion and popularity, the business community's concern for society
has existed for millennia.

In India, the CSR evolution has gone through various phases, from philanthropic to
strategic CSR the time period was not static, the below tabular column describes the CSR
development in India before 2013

Time Economic status Corporate CSR views

Period
1850-1914 Agriculture and specific Dynastic charity, the view is more
Industrialisation of a philanthropic
certain sector
(Colonial era)
1914-1947 Tax and tariff from British, Most of the social support for
Trade freedom
barriers struggle
Socialism, protectionism state Support state; launch own rural
1947-1960 control activity development program and help in
nation building

1960-1990 Heavy regulations Corporate trusts

1991-2013 Liberalization Family trusts, private-public

partnerships, NGO sponsorship
2013- Market economy focuses on Company act 2013, mandatory 2 %
present eradicate CSR
inequalities (Globalization)
Table 1: Time period of CSR development in India

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1.1) First Phase(1854-1914):
The initial stage of CSR in India was primarily focused on philanthropy and charity and
was influenced by religious ideologies. In addition, wealthy families like the Tata, Birla,
Godrej, and Bajaj have family ideals that stem from societal generosity. However, during
the colonial era, Indian business families started constructing schools, colleges, and other
community centers for the benefit of society rather than temples. Jamshetji N. Tata,
founder of the Tata Group and our nation's largest social development contributor, insisted
that people come before profits at all times.

1.2) Second Phase(1914-1947):

This age has been referred to as the "golden era" of charitable action in Indian business
since it was the time when large corporations made generous financial donations to assist
social, cultural, and political causes as well as political and liberation movements. When
industrialists like G.D. Birla, Jamnalal Bajaj, and others were influenced by Mahatma
Gandhi's "trusteeship" idea of wealth, the majority of the reforms about untouchability,
women's empowerment, community development, and other issues began. represented
Gandhi's trusteeship philosophy as a profoundly moral example of CSR for businesses. 

1.3) Third Phase(1947-1980):

The Indian economy was under government control throughout this time period, and
businesses were subject to rigid rules and regulations. The socialist and market economies
coexisted throughout this time period. Following independence, former Prime Minister
Jawaharlal Nehru was the driving force behind economic policy because of his propensity
for a socialist economic system. Because of this, PSUs dominated that age, and public
enterprises carried out the majority of CSR activities on behalf of their employees.

1.4) Fourth Phase(1980-2013):

Companies began embracing CSR as a sustainable business strategy during this period,
which was a time of tremendous growth for our nation's businesses and economy. The
maximum license policy was eliminated after Liberalization, Privatization, and
Globalization (LPG) in 1991, and the government now has policies that are friendly to
industry and support economic progress.

1.5) Current Phase(2013-Present):

India became the first nation to formally require corporate social responsibility on April 1,
2014. For businesses with a specified turnover and profitability, Section 135 of the Indian
Companies Act mandates that they devote 2% of their average net profit over the previous
three years to CSR.

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2) CSR In India after 2013:
CSR has been more significant over time in India as businesses understand the worth of
investing in it to achieve advantages such as higher shareholder value, a broader base of
revenue, strategic positioning, operational efficiency, easier access to financing, and
reduced business risk. CSR has become a powerful tool for coordinating corporate and
social sector efforts toward sustainable development and the advancement of societal
goals.

As mentioned before India became the first country to formally introduce a law to
implement CSR. It was introduced in the Companies Act 2013 of section 135.

The main states that Every organization, whether private, open (listed or unlisted), or
international, with branches or project offices in India that match any of the three specified
criteria given below during any of the three prior budget years would be subject to the CSR
arrangements:

• Having a net worth of at least 500 billion rupees, or more

• Having a revenue of at least one billion rupees, or more
• Having a net benefit of at least Rs. 5 million.

Establishing a corporate social responsibility committee of the board during the previous
financial year with a minimum of three directors, one of whom must be an independent
director. With the exception that a firm must have at least two directors on its Corporate
Social Responsibility Committee even if it is not necessary to designate an independent
director.

2.1) What is the role of the CSR Committee?

(a) Create and submit a corporate social responsibility policy recommendation to the
board.

(b) Decide how much money should be spent on the activities.

(c) Periodically check the company's corporate social responsibility policy.

As per section 135 of the Companies act, 2013 the government have specified area for
companies to invest in Social Projects.

The list of activities according to that Annexure follows:

 Enhancing vocational skills and providing training
 Improve education standards by promoting education
 Improve maternal health of women and reduce child mortality
 Protection of the environment and improve the sustainable environment
 Boost immune systems and combat virulent illnesses like dengue and malaria.
 Empowering women and working for gender equality.

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  Work on social projects and promote businesses and projects which are related
to social issues.
 Contribution to any fund which is come under central or state Government
which is related to social and economic development or Prime Minister relief
fund.
 The welfare and development of Scheduled Castes, Scheduled Tribes, and Other
Backward Classes (SC, ST, OBC) and other minorities.

3) CSR Spending by Top Companies in India year 2020-2021

Sr. No. Company Name Amount spent (in cr.)

1. Reliance Industries 922
2. Tata Consultancy 674
3. Infosys 362
4. ITC 335
5. Wipro 247
6. Tata Steel 222
7. Hindustan Zink 214
8. HCL 195
9. Mahanadi Coalfields 168
Table 2: CSR Spending by top Indian Companies

4) Contrast between Indian and Western views on CSR:

Corporate social responsibility is recognized as philanthropic engagement on a global

scale. According to Section 135 of the 2013 Company Act, CSR for businesses is
mandatory in India. CSR is still a voluntary activity in western nations. As seen by
some results, businesses have begun to use CSR as a strategic tool. It is also
important from a business and legal standpoint. CSR is still in its infancy in India and
is rarely used as a strategic tool there.

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References
Book

A History of Corporate Social Responsibility: Concepts and Practices -Archie B. Carrol

Journal

Evolution of CSR in India: Indian Roots in Emerging Context. Sushil Kumar Dixit, Sarita
Dixit (Journal of Advances and Scholarly Researches in Allied Education
Vol. XIV, Issue No. 2, January 2018, ISSN 2230-7540)

A Study On Evolution Of Corporate Social Responsibility In India 1KAUSHAL YADAV,

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Dr. RAJEEV K. SHUKLA , 3Dr. DEEPAK SHRIVASTAVA (Journal of Positive School
Psychology 2021, Vol. 5, No. 2, 186-195 )

Electronic document

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