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Corporate Social Responsibility Status in India
Corporate Social Responsibility Status in India
Dr. ShaileshMathur1
Abstract
In India from ancient time social responsibility is known as social duty or
charity, which is changing its nature in broader aspect, known as
Corporate Social Responsibility. Corporate Social Responsibility is defining
as a concept whereby companies integrate social and environmental
concerns in their business operations and in their interaction with their
stakeholders on a voluntary basis. Now a day’s organisations have realised
that ultimate goal is not profit making besides this trust building is viable
and assert able with societal relationship. Many of the leading companies
had realised the importance of being associated with social relevant causes
as a means of promoting their brand. Though, Indian companies are
practicing the Corporate Social Responsibility for decades but still it is at
its growth. A lack of understanding, inadequately trained personnel, policy
etc further adds to the reach and effectiveness of Corporate Social
Responsibility programs. This paper tries to focuses on the present status of
Corporate Social Responsibility in India.
Keywords: Corporate Social Responsibility, Organisations, Companies Act,
Charity.
1
Assistant Professor, S. S. Jain Subodh P. G. (Autonomous) College, Jaipur
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 77
Introduction
he concept of Corporate Social Responsibility (CSR) has been
developing since the early 1970’s. In today’s the world of
business CSR is a concept that has quite familiar. The concept of
Corporate Social Responsibility implies that companies
voluntarily integrate social and environmental concerns in their
operation and interaction with stakeholders. The importance of this
aspect emerged significantly in the decade and it expanded to include
both economic and social interests. Due to pressures from various
stakeholders, companies have become more transparent in accounting
and display public reporting. They have started incorporating their CSR
initiative in their annual reports.
It involves applying the concept of sustainable development to the
corporate world. Companies that respect and listen to their stakeholders
must naturally be concerned by their growth and profitability, but they
must also be aware of the economic, environmental, social and social
impacts of their activities.
Review of Literature
According to Francesco et.al (2008) the companies use different
strategies as well as diverse management system and tools to address
Corporate Social Responsibility issues along their supply chains.
According to Richa Gautam and Anju Singh (2010) all over the world the
companies are realising their stake in the society and engaging in various
social and environmental activities. Now the main requirement is
T
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 78
formulate effective strategic policies adopt various instruments so that
Corporate Social Responsibility can be best implemented towards its
goals - sustained environmental, social and economic growth.
According to Kabir (2011) the major reasons for involving Corporate
Social Responsibility practices by companies are to create and maintain a
favourable corporate image where companies should be viewed as social
organisations and in term of Corporate Social Responsibility practices
community involvement is higher than the other categories of it.
Prabhash Delei and Pravesh Dalei (2011) concluded his study on
Corporate Social Responsibility in India that there is a need to promote a
drive in Government companies towards greater accountability on
Corporate Social Responsibility and in order to attain the social
objectives, there is a need for framing a CSR policy in every company, as
given under voluntary guidelines by Ministry of Corporation Affairs, for
prioritisation of activities for spending and allocation of separate fund
for this purpose.
Objectives
The purpose of the study is to highlight the existing Corporate Social
Responsibility activities in India. The main objectives of this study are:
1. To study the concept of Corporate Social Responsibility
2. To study the present status of Corporate Social Responsibility.
Research Methodology
This study is based on the secondary data sourced from journals,
magazines, articles and media reports.
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 79
Concept of Corporate Social Responsibility
The concept of Corporate Social Responsibility is not a new one but its
focal point changes with the changing requirements of business and
varying social needs. The idea of Corporate Social Responsibility first
comes up in 1953 when it becomes an academic topic in H R Bowen’s
“Social Responsibilities of the Business”. After that, there has been
continuous debate on the concept and its implementation. There is no
single universally accepted definition of Corporate Social Responsibility,
but there are some definitions given by certain authors.
Corporate Social Responsibility is a concept whereby organisations serve
the interests of society by taking responsibility for the impact of their
activities on employees, shareholders, customers, communities and the
environment in all aspects of their operations. It is a term describing a
company’s obligation to be accountable to all of its stakeholders in all its
operations and activities. Socially responsible companies consider the
full scope of their impact on communities and the environment when
making decision, balancing the needs of stakeholders with their need to
make profit.
In short corporate social responsibility is the commitment of businesses
to contribute to sustainable economic development by working with
employees, their families, the local community and society at large, to
improve their lives in ways that are good for business and for
development.
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 80
Corporate Social Responsibility in India
Corporate social responsibility is not a new concept in India. India has a
long rich history of close business involvement in social causes for
national development. In the pre industrialisation period wealthy
merchants shared a part of their wealth with the wider society by way of
setting up temples for a religious cause. The industrial families of the 19th
century were strongly inclined towards economic as well as social
considerations. During the independence movement Mahatma Gandhi
introduces the notion of ‘trusteeship’, according to which the industry
leaders has to manage their wealth so as to benefit the common man.
Under his influence businesses established trusts for school and colleges
and also helped in setting up training and scientific institutions.
After independence, JRD Tata who point out that there were many ways
in which industrial and business enterprises can contribute to public
welfare beyond the scope of their normal activities. Slowly it began to be
accepted at least in theory that business had to share a part of the social
overhead costs. The significant change at that time was that industry
accepted social responsibility as part of the management of the
enterprise itself. Now, private and public companies of India need to
focus on planning, designing and implementing corporate social
responsibility, initiatives pertain to areas, such as, care for all
stakeholder, ethical functioning, respect for workers rights and welfare,
respect for human rights, environment and social and inclusive
development etc.
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 81
In India corporate social responsibility is in a very much building stage
and there is no such specific Act, Rules or Regulation relating to it.
However, there are voluntary guidelines issued by the Ministry of
Corporate Affairs and guidelines issued by Ministry of Public Enterprises
and Ministry of Heavy Industries of the Government of India. Guideline
for Corporate Social responsibility for Central Public Sector Enterprises
(CPSEs) by Ministry of Public Enterprises and Ministry of Heavy
Industries on 9th April, 2010.The Indian public sector has had a long
tradition of corporate social responsibility and initiatives of corporation
have played an important role in the development of several backward
regions of the country. Organisation like Bharat Petroleum Corporation
Limited (BPCL), Maruti Suzuki India Limited and Hindustan Unilever
Limited focus holistic development in the villages they have adopted.
They provided better medical and sanitation facilities, build schools and
houses and help the villagers become self reliant by teaching them
vocational and business skills. The Tata Steel Rural Development Society
aims to improve agricultural productivity and raise farmer’s standard of
living. BHEL and Indian Airlines have been acclaimed for disaster
management effort. BHEL has also adopted 56 villages having nearly
80,000 inhabitants. Hindalco industries corporate social responsibility
activities are concentrated in 692 villages and 12 urban slums, where it
reaches out to about 26 lakh people. It has constructed check dams,
ponds and bore wells to provide safe drinking water, awards scholarship
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 82
to students, runs medical camps and operates rural mobile medical van
services etc.
The present condition seems to be changing as many companies are
trying to accept corporate social responsibility as more than just planting
trees or giving away charity to the needy. Nearly all leading corporate in
India are involved in corporate social responsibility programs in areas
like education, health, livelihood creation, skill development and
empowerment of weaker sections of society. India has been named
among the top ten Asian countries paying increasing importance towards
corporate social responsibility disclosure norms. According to social
enterprise CSR Asia’s Sustainability Ranking, released in October 2009,
India was ranked fourth in the list. In Companies Bill 2013, Companies of
specified size will have to spend at least 2 percent of their average net
profit during 3 preceding years on CSR activities. Amount has to be
preferably spent near or account the areas where the company operates
its business. This provision is definitely promote the inclusive growth of
Indian economy.
Conclusion
In the recent years corporate business houses have substantially
involved towards societal responsibility. The concept of CSR is now
firmly rooted on the global business agenda. The companies’ bill is a
good initiative on the part of the government. Corporate social
responsibility is regarded as an important business issue of Indian
companies. Corporate social responsibility activity has to play a positive
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 83
impact not only on development of community but also on their business
promotions. Now companies have started to realise the importance of
corporate social responsibility and initiating the steps towards it.
References
1. Handbook on Corporate Social Responsibility in India, PWC, (2013).
2. Indian Corporate Responsibility Report Survey (2013), KPMG
International.
3. Mohan, A. (2001), Corporate Citizenship: Perspectives from India,
Journal of Corporate Citizenship. Spring.
4. Moon, J. (2002), Corporate Social Responsibility: An Overview.
International Directory of Corporate Philanthropy, London.
5. Kumar, Nitin (2014), Corporate Social Responsibility: An Analysis of
Impact and Challenges in India, Abhinav International Monthly
Refereed Journal of Research In Management & Technology.
6. Arora, Renu and RichaGarg (2013), Corporate Social Responsibility –
Issues and Challenges in India, International Journal of Research in
Financial & Marketing.
7. Gautam, Richa and Anju Singh (2010), Corporate Social
Responsibility Practice in India: A Study of Top 500 Companies,
Global Business and Management Research: An International Journal.
8. Ghose, Soheli (2012), A Look into Corporate Social Responsibility in
India and emerging economies, International Journal of Business and
Management Invention.
Professional Panorama: An International Journal of Management & Technology
Corporate Social Responsibility Status in India 84
9. Moharana, Sarita (2013), Corporate Social Responsibility – A Study of
Selected Public Sector Banks in India, IOSR Journal of Business and
Management.
10. The Gazette of India: Extraordinary, Part II Sec. 3 (i), (February 2014).
11. http://mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_2
4dec2009.pdf
12. http://oecdwatch.org/about-oecd/guidelines.

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Corporate social responsibility status in india

  • 1. Corporate Social Responsibility Status in India Corporate Social Responsibility Status in India Dr. ShaileshMathur1 Abstract In India from ancient time social responsibility is known as social duty or charity, which is changing its nature in broader aspect, known as Corporate Social Responsibility. Corporate Social Responsibility is defining as a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis. Now a day’s organisations have realised that ultimate goal is not profit making besides this trust building is viable and assert able with societal relationship. Many of the leading companies had realised the importance of being associated with social relevant causes as a means of promoting their brand. Though, Indian companies are practicing the Corporate Social Responsibility for decades but still it is at its growth. A lack of understanding, inadequately trained personnel, policy etc further adds to the reach and effectiveness of Corporate Social Responsibility programs. This paper tries to focuses on the present status of Corporate Social Responsibility in India. Keywords: Corporate Social Responsibility, Organisations, Companies Act, Charity. 1 Assistant Professor, S. S. Jain Subodh P. G. (Autonomous) College, Jaipur
  • 2. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 77 Introduction he concept of Corporate Social Responsibility (CSR) has been developing since the early 1970’s. In today’s the world of business CSR is a concept that has quite familiar. The concept of Corporate Social Responsibility implies that companies voluntarily integrate social and environmental concerns in their operation and interaction with stakeholders. The importance of this aspect emerged significantly in the decade and it expanded to include both economic and social interests. Due to pressures from various stakeholders, companies have become more transparent in accounting and display public reporting. They have started incorporating their CSR initiative in their annual reports. It involves applying the concept of sustainable development to the corporate world. Companies that respect and listen to their stakeholders must naturally be concerned by their growth and profitability, but they must also be aware of the economic, environmental, social and social impacts of their activities. Review of Literature According to Francesco et.al (2008) the companies use different strategies as well as diverse management system and tools to address Corporate Social Responsibility issues along their supply chains. According to Richa Gautam and Anju Singh (2010) all over the world the companies are realising their stake in the society and engaging in various social and environmental activities. Now the main requirement is T
  • 3. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 78 formulate effective strategic policies adopt various instruments so that Corporate Social Responsibility can be best implemented towards its goals - sustained environmental, social and economic growth. According to Kabir (2011) the major reasons for involving Corporate Social Responsibility practices by companies are to create and maintain a favourable corporate image where companies should be viewed as social organisations and in term of Corporate Social Responsibility practices community involvement is higher than the other categories of it. Prabhash Delei and Pravesh Dalei (2011) concluded his study on Corporate Social Responsibility in India that there is a need to promote a drive in Government companies towards greater accountability on Corporate Social Responsibility and in order to attain the social objectives, there is a need for framing a CSR policy in every company, as given under voluntary guidelines by Ministry of Corporation Affairs, for prioritisation of activities for spending and allocation of separate fund for this purpose. Objectives The purpose of the study is to highlight the existing Corporate Social Responsibility activities in India. The main objectives of this study are: 1. To study the concept of Corporate Social Responsibility 2. To study the present status of Corporate Social Responsibility. Research Methodology This study is based on the secondary data sourced from journals, magazines, articles and media reports.
  • 4. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 79 Concept of Corporate Social Responsibility The concept of Corporate Social Responsibility is not a new one but its focal point changes with the changing requirements of business and varying social needs. The idea of Corporate Social Responsibility first comes up in 1953 when it becomes an academic topic in H R Bowen’s “Social Responsibilities of the Business”. After that, there has been continuous debate on the concept and its implementation. There is no single universally accepted definition of Corporate Social Responsibility, but there are some definitions given by certain authors. Corporate Social Responsibility is a concept whereby organisations serve the interests of society by taking responsibility for the impact of their activities on employees, shareholders, customers, communities and the environment in all aspects of their operations. It is a term describing a company’s obligation to be accountable to all of its stakeholders in all its operations and activities. Socially responsible companies consider the full scope of their impact on communities and the environment when making decision, balancing the needs of stakeholders with their need to make profit. In short corporate social responsibility is the commitment of businesses to contribute to sustainable economic development by working with employees, their families, the local community and society at large, to improve their lives in ways that are good for business and for development.
  • 5. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 80 Corporate Social Responsibility in India Corporate social responsibility is not a new concept in India. India has a long rich history of close business involvement in social causes for national development. In the pre industrialisation period wealthy merchants shared a part of their wealth with the wider society by way of setting up temples for a religious cause. The industrial families of the 19th century were strongly inclined towards economic as well as social considerations. During the independence movement Mahatma Gandhi introduces the notion of ‘trusteeship’, according to which the industry leaders has to manage their wealth so as to benefit the common man. Under his influence businesses established trusts for school and colleges and also helped in setting up training and scientific institutions. After independence, JRD Tata who point out that there were many ways in which industrial and business enterprises can contribute to public welfare beyond the scope of their normal activities. Slowly it began to be accepted at least in theory that business had to share a part of the social overhead costs. The significant change at that time was that industry accepted social responsibility as part of the management of the enterprise itself. Now, private and public companies of India need to focus on planning, designing and implementing corporate social responsibility, initiatives pertain to areas, such as, care for all stakeholder, ethical functioning, respect for workers rights and welfare, respect for human rights, environment and social and inclusive development etc.
  • 6. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 81 In India corporate social responsibility is in a very much building stage and there is no such specific Act, Rules or Regulation relating to it. However, there are voluntary guidelines issued by the Ministry of Corporate Affairs and guidelines issued by Ministry of Public Enterprises and Ministry of Heavy Industries of the Government of India. Guideline for Corporate Social responsibility for Central Public Sector Enterprises (CPSEs) by Ministry of Public Enterprises and Ministry of Heavy Industries on 9th April, 2010.The Indian public sector has had a long tradition of corporate social responsibility and initiatives of corporation have played an important role in the development of several backward regions of the country. Organisation like Bharat Petroleum Corporation Limited (BPCL), Maruti Suzuki India Limited and Hindustan Unilever Limited focus holistic development in the villages they have adopted. They provided better medical and sanitation facilities, build schools and houses and help the villagers become self reliant by teaching them vocational and business skills. The Tata Steel Rural Development Society aims to improve agricultural productivity and raise farmer’s standard of living. BHEL and Indian Airlines have been acclaimed for disaster management effort. BHEL has also adopted 56 villages having nearly 80,000 inhabitants. Hindalco industries corporate social responsibility activities are concentrated in 692 villages and 12 urban slums, where it reaches out to about 26 lakh people. It has constructed check dams, ponds and bore wells to provide safe drinking water, awards scholarship
  • 7. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 82 to students, runs medical camps and operates rural mobile medical van services etc. The present condition seems to be changing as many companies are trying to accept corporate social responsibility as more than just planting trees or giving away charity to the needy. Nearly all leading corporate in India are involved in corporate social responsibility programs in areas like education, health, livelihood creation, skill development and empowerment of weaker sections of society. India has been named among the top ten Asian countries paying increasing importance towards corporate social responsibility disclosure norms. According to social enterprise CSR Asia’s Sustainability Ranking, released in October 2009, India was ranked fourth in the list. In Companies Bill 2013, Companies of specified size will have to spend at least 2 percent of their average net profit during 3 preceding years on CSR activities. Amount has to be preferably spent near or account the areas where the company operates its business. This provision is definitely promote the inclusive growth of Indian economy. Conclusion In the recent years corporate business houses have substantially involved towards societal responsibility. The concept of CSR is now firmly rooted on the global business agenda. The companies’ bill is a good initiative on the part of the government. Corporate social responsibility is regarded as an important business issue of Indian companies. Corporate social responsibility activity has to play a positive
  • 8. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 83 impact not only on development of community but also on their business promotions. Now companies have started to realise the importance of corporate social responsibility and initiating the steps towards it. References 1. Handbook on Corporate Social Responsibility in India, PWC, (2013). 2. Indian Corporate Responsibility Report Survey (2013), KPMG International. 3. Mohan, A. (2001), Corporate Citizenship: Perspectives from India, Journal of Corporate Citizenship. Spring. 4. Moon, J. (2002), Corporate Social Responsibility: An Overview. International Directory of Corporate Philanthropy, London. 5. Kumar, Nitin (2014), Corporate Social Responsibility: An Analysis of Impact and Challenges in India, Abhinav International Monthly Refereed Journal of Research In Management & Technology. 6. Arora, Renu and RichaGarg (2013), Corporate Social Responsibility – Issues and Challenges in India, International Journal of Research in Financial & Marketing. 7. Gautam, Richa and Anju Singh (2010), Corporate Social Responsibility Practice in India: A Study of Top 500 Companies, Global Business and Management Research: An International Journal. 8. Ghose, Soheli (2012), A Look into Corporate Social Responsibility in India and emerging economies, International Journal of Business and Management Invention.
  • 9. Professional Panorama: An International Journal of Management & Technology Corporate Social Responsibility Status in India 84 9. Moharana, Sarita (2013), Corporate Social Responsibility – A Study of Selected Public Sector Banks in India, IOSR Journal of Business and Management. 10. The Gazette of India: Extraordinary, Part II Sec. 3 (i), (February 2014). 11. http://mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_2 4dec2009.pdf 12. http://oecdwatch.org/about-oecd/guidelines.