Concept

• Corporate Social Responsibility refers to a business approach where companies integrate social, environmental, and ethical concerns into their operations and stakeholder interactions
• It moves beyond profit maximisation to accountability for societal and environmental impact
• CSR supports sustainable development, inclusive growth, and responsible business conduct

Legal Framework in India

• CSR is governed by Section 135 of the Companies Act, 2013
• Mandatory CSR applies to companies meeting any of the following thresholds in the preceding financial year
  • Net worth above ₹5,000 crore
  • Turnover above ₹10,000 crore
  • Net profit above ₹50 crore
• Eligible companies must spend at least 2 percent of the average net profits of the previous three years on CSR activities

Evolution of CSR Policy

• 2009: Voluntary Guidelines on CSR introduced by the
• 2011: National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business
• 2019: National Guidelines on Responsible Business Conduct aligned with
  • UN Sustainable Development Goals
  • UN Guiding Principles on Business and Human Rights
  • Paris Climate Agreement

Key Areas of CSR Engagement

• Poverty alleviation and rural development through livelihood, housing, sanitation, and infrastructure projects
• Healthcare support including hospitals, mobile clinics, nutrition programs, and emergency health responses
• Education and skill development through schools, scholarships, digital literacy, and vocational training
• Environmental sustainability focusing on afforestation, water conservation, renewable energy, and climate resilience
• Women empowerment and support to marginalised communities through self-help groups and entrepreneurship programs

Significance of CSR in India

• Acts as a supplement to public welfare spending, especially in health, education, and rural development
• Helps bridge regional and social development gaps where state capacity is limited
• Strengthens corporate accountability and ethical governance
• Enhances community resilience, local employment, and human capital formation
• Aligns business growth with national and global sustainability goals

Major Challenges in CSR Implementation

• Short project timelines due to delayed approvals leading to preference for quick-impact projects
• Geographic concentration of CSR spending in developed and urbanised states
• Weak monitoring and evaluation systems focused more on financial reporting than social impact
• Dependence on intermediary agencies reducing transparency and efficiency
• Limited capacity and financial sustainability of NGOs due to short-term funding
• Compliance-driven approach where CSR is treated as a legal obligation rather than a development strategy

Key Issues in Governance and Accountability

• Lack of standardised impact assessment metrics across sectors
• Inadequate community participation in project design and implementation
• Underutilisation of CSR funds resulting in unspent balances
• Limited alignment between CSR initiatives and district or local development plans

Measures to Improve CSR Effectiveness

• Adoption of multi-year CSR planning frameworks instead of annual spending cycles
• Creation of integrated digital platforms for real-time monitoring, fund tracking, and impact evaluation
• Professionalisation of CSR management with trained domain experts
• Collaborative CSR models where companies pool resources for large-scale interventions
• Cluster-based and district-focused approaches aligned with local development priorities
• Stronger emphasis on outcome-based and sustainability-linked impact measurement

Conclusion

• CSR in India has evolved from voluntary philanthropy to a statutory instrument for inclusive development
• Its transformative potential lies in shifting from compliance-led spending to strategic, community-driven, and impact-oriented interventions
• With better planning, accountability, and collaboration, CSR can become a powerful tool for long-term social and environmental progress