Corporate Social Responsibility (CSR)

Prof. Muneza Kagzi

T. A. Pai Management Institute (TAPMI)

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Contents
• Meaning and definition
• Evolution of CSR
• CSR in present scenario
• Examples of CSR
• Conclusion
• Recap of previous sessions

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 What?

How
Why?
CSR much?

How? Examples

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Meaning and definition of CSR

Corporate social responsibility (CSR) is a business

model that helps a company be socially accountable —
to itself, its stakeholders, and the public

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CSR is new to India or it was prevailing in some other form?

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Evolution of CSR
Sr. Time period Economic situation State role Corporate CSR
no
1 1850-1914 Industrialization Colonial Extraction Dynastic Charity
2 1914-1947 Trade barrier for new Colonial exploitative Support freedom struggle
Industries
3 1947-1960 Socialism, Protectionism Five Year Plans Support new state; launch
new rural initiatives
4 1961-1990 Heavy regulation License raj; development Corporate trusts
failure
5 1991-2013 Liberalization Shrinking in production; Family trust, Public- Private
expanding in social partnership, NGO,
provision Sponsorship
6 2013- present Globalization Need to manage inequality; Introduction of mandatory
new reforms to liberalize CSR- 2%
further

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Does CSR apply to your company?

• Yes if,

or or

Net worth> 500 crore Net profit>5 crore

Turnover>1000 crore

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Now what for CSR?
1. CSR committee
Three or more directors with at least one independent director.
2. CSR policy
Activity/ Programme
3. Spend 2%
Of average net profit of last three years
4. Disclosure
Annual report and on website

New amendments (1st Aug, 2019)- Fine+ imprisonment

Fines for both the company and defaulting officers ranging

from Rs 50,000 to Rs 25 lakh and Officers also liable for
imprisonment of up to three years, as per the provisions in the
Companies Amendment Bill, 2019

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What CSR rule mandate?
Activities must be in project or
programme mode

Must have strong monitoring and

Must be based on CSR policy reporting system

Preferably in local region of operation According to a March 23, 2020 Ministry

of Corporate Affairs circular, all
expenditures incurred on activities
related to COVID-19 would be added as
May undertake activities through a not permissible avenues for CSR
profit of reputation or own foundation expenditure

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What is not CSR?

Activities benefiting only the

Expenses on activities required for any
employees of the company & their
compliance
family

Expenses on activities in pursuance of On- off events such as advertisements/

Normal course of business awards/ sponsorship

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(Amt. in ₹Crore)
Development ₹ 123 ₹ 123 ₹ 121
₹ 157Sector wise break up of CSR0%Spend
₹ 36
2% Education
₹ 160 2% 1% 1% 1% 0.22% ₹ 19 Health & WASH
₹ 165 2% 0.21% ₹ 18 Environment
₹ 192 2% Rural Development
Women Empowernment
4%
PM Relief Fund
₹ 326 32%
Others
12%
₹ 2728 Sports Promotion
₹ 1017 Art & Culture
Slum development
Administrative Overheads
14% Swachh Bharat Kosh
₹ 1213
26% Any Other fund
₹ 2246
Clean Ganga Fund
Contribution to Corpus

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Implementation of CSR

Company’s own Direct investments by Partnership with other

foundation company organization

NGO- Goonj, Katha,

Reliance, Infosys, Wipro TATA, ITC
Pratham, CRY

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Implementation of CSR

www.crisil.com › 2020/06 › doing-good-in-bad-time 16

Should company spend money on CSR?

Yes/No

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Why to do CSR?

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Reason’s for CSR

Develop good
Being sensitive to all
relationship with local Brand image Reputation
stakeholders
community

Employee engagement Customer retention Sources of Innovation

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COVID and CSR

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CSR- COVID times

Apart from establishing a 50-bed Covid hospital in Bengaluru

last year, they are now supporting health care infrastructure
by giving ventilators, oxygen concentrators, PPE kits and
masks.

The Foundation is also helping construction workers with

food kits, apart from conducting awareness programmes
around vaccinations to remove vaccine hesitancy.  

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 Challenges- CSR
• Clear and consistent regulations and standards that govern CSR
• Limited Availability of Well Organized Non-Governmental
Organizations
• Measurement
• Narrow Perception Towards CSR
• Non equitable distribution of CSR funding
• Section 135 of the Companies Act

https://indiacsr.in/corporate-social-responsibility-challenges-in-india/
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 As of 2020-21, 10 states received 80 per cent of all CSR funding.
In 2021, the Ministry of Corporate Affairs had clarified that
preference for local areas is not mandatory, and the spirit of
the legislation is to align CSR with national priorities. However,
the concentration of funding in a few states suggests that
companies still prefer to direct their CSR funding locally.

https://indianexpress.com/article/opinion/columns/a-challenge-to-corporates-from-rbi-8842677/
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Examples of CSR

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Company?

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CSR
initiatives
by ITC

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ITC About- Conglomerate

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CSR Initiatives of ITC

E Chaupal

Women Empowerment

Primary Education

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How eChaupal works?
Sanchalak Samyojaks
Farmers (a trained farmer) Manages a ITC
Manages a kiosk warehouse

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 eChaupal
• Initiated in the year 2000 to directly link with farmers
• Kiosk with Internet access is run by a sanchalak — a trained farmer
• The computer is housed in the sanchalak's house and is linked to the Internet via phone lines or
by a VSAT connection
• Each installation serves an average of 600 farmers in the surrounding ten villages within about a
5 km radius.
• The sanchalak bears some operating cost but in return earns a service fee for the e-transactions
done through his e-Choupal.
• The warehouse hub is managed by the same traditional middle-men, now called samyojaks, but
with no exploitative power due to the reorganisation.
• There are 6,100 e-Choupals in operation in 35,000 villages in 10 states (Madhya Pradesh,
Haryana, Uttarakhand, Uttar Pradesh, Rajasthan, Karnataka, Kerala, Maharashtra, Andhra Pradesh
and Tamil Nadu)
• Serves 4 million farmers

https://www.youtube.com/watch?v=tCtHEby8ugM 31
 Traditional Value Chain

Farmer Mandi ITC

Processing

Other buyers

Inbound Display and Bagging and Outbound

Auction Payment
logistics Inspection Weighing Logistics

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 Modified eChaupal Value Chain
Mandi Other buyers
Price
discovery
Farmer ITC Processing

eChaupal

Inbound Display and Bagging and Outbound

Auction Payment
logistics Inspection Weighing Logistics

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Which are the benefits of eChaupal?

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Outcomes of eChupal
• Win-win situation for farmers and ITC
• Farmers
• Competitive pricing
• Rise in farm yield
• Timely payment
• Improved standard of living
• Savings on transection cost (Compare to Mandi)
• ITC
• Timely raw materials
• Reputation
• Quality assurance

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Tata Motors- CSR
• Rs. 22 crores (Standalone) towards various schemes of CSR in FY
2018-19.

• Not eligible for CSR (not reported profit)

• https://www.youtube.com/watch?v=arSMxYZzGYs

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 RIL
• Rural Transformation, Health, Education, Sports for Development,
Disaster Response, Arts, Culture and Heritage, and Urban Renewal
• Project Jagruti
• A project to uplift and bring dyslexic students from the underprivileged
segment into the main stream
• Women and youth empowerment

https://www.ril.com/OurCompany/CSR.aspx#:~:text=Reliance%20provides%20affordable%20curative
%20and,various%20camps%20on%20health%20awareness

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Wipro
• Wipro has spent more than the prescribed CSR budget in the last
three financial years

• Education, Ecology, and Community Care.

• https://www.youtube.com/watch?v=o0Ur-JqQmvQ

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 • Rangan, K., Chase, L. and Karim, S., 2015. The
truth about CSR. Harvard Business Review,
93(1/2), pp.40-49.

References • www.crisil.com › 2020/06 › doing-good-in-bad-

time

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 Thank you

Thank you

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