Corporate Social Responsibility (CSR) in India has deep roots that trace back to the period of industrialization from 1850 to 1914. Initially, it was driven by philanthropy, where industrialists contributed to societal welfare. After India gained independence, CSR evolved into a significant tool for promoting social development. The mixed economy era from 1960 to 1980 further emphasized the need for regulatory frameworks, particularly for public-sector undertakings (PSUs).
The term "Corporate Social Responsibility" was first coined by American economist Howard Bowen in 1953. Bowen is often celebrated as the "father of CSR" for his pivotal role in bringing the concept into mainstream economic discussions.
A significant turning point for CSR in India occurred in 2013 with the implementation of the mandatory CSR law under the Companies Act of 2013. This landmark legislation made India the first country to require eligible companies to allocate at least 2% of their average net profit from the last three years towards CSR activities.
Initially, CSR activities in India were largely about compliance, focusing on convenient causes that fell within legal boundaries. However, over the past decade, there has been a notable shift. Companies are now striving to create measurable impacts, aligning their CSR initiatives with broader business strategies.
An exemplary CSR program in India is the JSW Foundation, which operates under the JSW Group. The foundation has dedicated sectoral heads focusing on critical areas such as agriculture, health, and education. It implements location-specific initiatives in regions like rural Maharashtra and Karnataka, demonstrating a strategic approach to CSR.
Despite the progress, CSR in India faces several challenges. A significant issue is the uneven allocation of CSR funds. Wealthier regions and sectors such as education and healthcare tend to receive the most funding, leaving critical areas like socio-economic inequalities underfunded and less addressed.
Looking ahead, the future of CSR in India is expected to focus on addressing the root causes of inequalities. There will be an emphasis on underserved states and districts, with long-term, sustainable projects aimed at creating deeper impacts and broader outreach becoming increasingly prevalent.
Q1. What is the significance of CSR in India?
Answer: CSR plays a critical role in addressing social issues and promoting sustainable development in India, allowing businesses to contribute positively to society while ensuring compliance with regulations.
Q2. How did the 2013 CSR law change corporate practices in India?
Answer: The 2013 CSR law mandated companies to invest in social initiatives, shifting CSR from voluntary actions to a legal obligation, thereby enhancing corporate accountability.
Q3. What are common areas of CSR funding in India?
Answer: Common areas for CSR funding in India include education, healthcare, and environmental sustainability, although some critical areas still lack adequate support.
Q4. How can CSR initiatives measure their impact?
Answer: CSR initiatives can measure their impact through defined metrics, stakeholder feedback, and assessments that evaluate the effectiveness of their programs in addressing social issues.
Q5. Why is there an uneven allocation of CSR funds in India?
Answer: The uneven allocation of CSR funds often arises from regional disparities, where wealthier areas attract more investment due to better infrastructure and visibility, leaving poorer regions underserved.
Question 1: Who is known as the "father of CSR"?
A) Milton Friedman
B) Howard Bowen
C) Peter Drucker
D) John Maynard Keynes
Correct Answer: B
Question 2: What percentage of net profits must companies allocate to CSR as per the 2013 law?
A) 1%
B) 2%
C) 3%
D) 5%
Correct Answer: B
Question 3: Which foundation is known for effective CSR initiatives in India?
A) Tata Trusts
B) JSW Foundation
C) Reliance Foundation
D) Infosys Foundation
Correct Answer: B
Question 4: What was the primary focus of early CSR initiatives in India?
A) Compliance
B) Profit maximization
C) Shareholder value
D) Environmental sustainability
Correct Answer: A
Question 5: Which area often receives the most CSR funding?
A) Agriculture
B) Socio-economic inequalities
C) Healthcare
D) Rural development
Correct Answer: C
Question 6: What is a major challenge facing CSR in India today?
A) Over-regulation
B) Uneven fund allocation
C) Lack of interest
D) Legal complications
Correct Answer: B
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