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Mridul Crystelle Singh
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Section E
Word Count :1134 (including in text citation)

Can CSR play a role to counterweigh the ill-effects of Covid-19 on the economy?
The tragedy of the commons is a problem in economics that occurs when individuals
neglect the well-being of society in the pursuit of personal gain. This leads to over-
consumption and ultimately depletion of the common resource, to everybody's detriment.

Garrett Hardin’s metaphorical pasture in ‘The tragedy of the commons’ allows us to think of
a world where rational individuals make profitable business decisions while being callous
about the cost borne by others due to their acts (Hardin,1968). Modern corporations continue
to graze in Hardin’s metaphorical pasture ; , negative externalites via such corporate
activities can be avoided or reduced by self -regulating model – corporate Corporate Social
Responsibility (CSR).

CSR guides and directs business activity to promote social accountability and safeguarding,
to some extent third party interests such as the -environment, human rights issues, labour
protection, etc (Lin, 2020). Now imagine Hardin’s pasture being consumed by a deadly and
poisonous moss. Public Listed companies- ‘RJD RATA ’ and ‘Lambani’ have the option to
increase CSR spending to meet the need of the hour and invest in industrial quality
agricultural products , or on the other hand they have the rightful choice to reduce CSR
spending given lower annual profits of the company due to the deadly moss, they may even
fire their employees and leave them exposed to the poisonous fumes if the economic agent
wishes to do so. Today, as our world’s economy continues to crumble under the thumb of the
COVID-19 pandemic, it is important to realise the role and scope of CSR in combatting the
adverse effects inflicted upon society by the virus.
India’s CSR Trend In Terrible Times Of COVID-19
The Ministry of Corporate Affairs in March 2020 clarified that CSR funds for battling the
pandemic will be eligible to be considered within the ambit CSR activities. Companies with
pending CSR obligations saw this opportunity to redeem themselves by exhibiting the very
spirit behind section Section 135 and Schedule VII of the Companies Act 2013, as well as to
meet the statutory requirements under the section. The Modi Government amended the
aforementioned schedule of the CA to set up the PM Cares fund, and stated that the same was
done as “People …expressed their desire to donate to India’s war against COVID-19”. There
is a possibility that such amendment to the schedule may change the interpretation of CSR in
times to come.i The problem is that the MCA has time and again reiterated that CSR activities
should not be termed charity or donation, as that would break away from the intended spirit
embodied in the Act.
 While Companies like Infosys Limited have according to a report spent close to Rs. 360
crores in CSR activities in 2020. (Thacker, 2021) This year the company’s CSR schemes in
majority were focused on COVID-19 relief funds. The company helped hospitals set up 100
bed quarantine facilities.ii Similarly 100’s of corporate giants came together within the first
few weeks and provided 6500 crores of CSR funding into the PM cares fund. It is interesting
to note that funding to State governments is not considered a part of CSR.iii
CSR policies in India are made in an ad-hoc manner, as we have seen in recent times.
Companies that did not have CSR policy to guide corporate activities found themselves
unable to cope with the pressures of the economic slowdown due to the pandemic. Lakhs of
employees have been asked to leave indefinitely as companies adjusts to lower profit
margins; CSR is not part of core business activity. The reality is that firms have had to slash
CSR due to COVID.iv

Recommendations for CSR policy in India

Corporate morality in the U.K has brought 200 businesses together who are putting forward
sustainable economic models as a submission of their recovery plan for Covid. ("More than
200 leading businesses urge UK Government to deliver clean, inclusive and resilient
recovery plan — Corporate Leaders Groups", 2021) This submission has been made to
U.K’s PM Boris, the initiative is remarkable and resonates the spirit of CSR. India’s approach
to tackle covid Covid has been completely state centric unlike what has been seen in the U.K.
India may have failed as a welfare state in the past, but Indian corporations must realize that
directing CSR spending towards healthcare facilities will soon aid in reversing the economic
slowdown which is in their interest.v
Our government should also move towards schemes for job retention, such as wage subsidies
to corporationsvi that has been done by U.K, Germany, etc (SCARPETTA, 2021). U.K’s
Furlough schemevii could be replicated in India, if the government wishes to direct a part of
the PM Fund to aid job retention-as the future of India lies in the upliftment of our economy.

In Conclusion
I point to Carroll’s model of social responsibility (Srivastava et al., 2012) which provides a
hierarchy of responsibilities for Corporations when devising their CSR policy. The lowest in
this hierarchy is “discretionary responsibilities”. If we go back to my introduction, it is within
management discretion to have CSR policy lean towards Gandhian principles of Trusteeship
or ‘corporate altruism’. A Company like RJD RATA may have CSR policy that holds
morality at the core of its business, and hence in a way carries on its mission to use its wealth
for the welfare of society. Whereas Lambani’s CSR policy may echo the tunes of corporate
altruism, hence believing certain CSR spending absolves them of further responsibility to the
society.
References

Hardin, G. (1968). The Tragedy of the Commons. Science, 162(3859), 1243-1248. from

http://www.jstor.org/stable/1724745
Lin, L. (2020). Mandatory Corporate Social Responsibility Legislation around the World:
Emergent Varieties and National Experiences. Oxford Law Faculty. from
https://www.law.ox.ac.uk/business-law-blog/blog/2020/11/mandatory-corporate-social-
responsibility-legislation-around-world.
Majumdar, A. (2015). India's Journey with Corporate Social Responsibility- What
Next?. Journal Of Law And Commerce, 165(2)., from.
Ramnani, V. (2021). FY20 CSR Spend Plummets To Rs 7,800 Crore – Half Of FY19: Report.
Moneycontrol, from https://www.moneycontrol.com/news/business/fy20-csr-spend-
plummets-to-rs-7800-crore-half-of-fy19-report-6511711.html.
Thacker, K. (2021). Top 100 companies in India for CSR in 2020 - The CSR Journal. The
CSR Journal. from https://thecsrjournal.in/top-indian-companies-for-csr-in-2020/.
More than 200 leading businesses urge UK Government to deliver clean, inclusive and
resilient recovery plan — Corporate Leaders Groups. Corporateleadersgroup.com. (2021).
from https://www.corporateleadersgroup.com/reports-evidence-and-insights/news-items/
leading-businesses-urge-uk-government-to-deliver-resilient-recovery-plan.
SCARPETTA, S. (2021). Job retention schemes during the COVID-19 lockdown and beyond.
OECD. from https://www.oecd.org/coronavirus/policy-responses/job-retention-schemes-
during-the-covid-19-lockdown-and-beyond-0853ba1d/.
Srivastava, A., Negi, G., & Mishra, V. (2012). Corporate Social Responsibility: A Case
Study Of TATA Group. Iosrjournals.org.from
http://www.iosrjournals.org/iosr-jbm/papers/vol3-issue5/D0351727.pdf.
i
This is problematic as tax avoidance may be incentive for companies to absolve themselves quickly from expected
level of social responsibility, by doing the bare minimum.
ii
Infosys partnered with Naryana Health City and Bowring and Lady Curzon Medical College and research Institute of
Bangalore.
iii
Many corporates have voiced their disaffection towards the State’s lack of transparency, as they are unable to map
their contribution to the fight against COVID-19. It is also important to keep in mind that CSR is opportunity for
marketing and advertising for a company, the business must go on!
iv
See also, “Economic downturn due to the COVID-19 pandemic has impacted corporate social responsibility (CSR),
evidenced by businesses’ charity spend for FY20 dipping by 50 percent of FY19 numbers, data showed.” (Ramnani,
2021).
v
See also, “"The health of people, our planet and the economy go hand in hand.  Rather than competing priorities, they
can and should be treated together.  We have a unique opportunity to integrate climate action into recovery plans to
create lasting change." ("More than 200 leading businesses urge UK Government to deliver clean, inclusive and
resilient recovery plan — Corporate Leaders Groups", 2021)
vi
This is very unlikely as the Indian government had not included the payment of wages during lockdown as a
acceptable CSR activity.
vii
The furlough scheme has been able to pay up wages for employees in the U.K who were unable to come to office due
to the nature of lockdowns , the cost of the scheme as been 41 billion dollars and this relief has reached a staggering 9.5
million people.