Corporate Social Responsibility in India and its Implications

The first and foremost advantage of CSR is that the transparency filter that has shown positive trends in India.
Ashwin Singh
March 16, 2021

What is CSR?

While there exists no single universally accepted definition of Corporate Social Responsibility (CSR), each definition that currently exists hints us towards the impact that businesses have on the current society. Although the roots of Corporate Social Responsibility (CSR) lies in the various existing philanthropical activities (such as donations, charity, relief work, etc.) of the corporations, globally, the theme of Corporate Social Responsibility (CSR) has witnessed improvements. This is visible in the various definitions by various authors and authorities:

The EC1 defines CSR as “the responsibility of enterprises for their impacts on society”.

To completely meet their social responsibility, enterprises “should have in situ a process to integrate social, environmental, ethical human rights and consumer concerns into their business operations and core strategy in close collaboration with their stakeholders, it’s clear that:

  • The CSR approach is focusing on the core business which is the main nature of CSR.
  • CSR must address the happiness of all the stakeholders and not only companies stakeholders are benefitted through it.
  • Philanthropic activities are only part of CSR, which otherwise constitutes a far larger set of activities entailing strategic business benefits.

CSR in India

After understanding the Definition and basic idea of CSR, it’s important to see and understand the current situation of CSR in India. In India, it has traditionally been seen as a philanthropic activity. As a result, there exists a limitation in the documentation on specific activities related to the very topic. As some observers have pointed out, the practise of CSR in India still remains within the philanthropic space, but now it’s not only limited to only the institutions but has come to a community phase through various projects.

Also, with global influences and with communities becoming more active and demanding, there appears a positive trend, that while CSR remains largely restricted to community development, it is getting more influenced with business activities (strategic) than philanthropic and a positive trend has been seen among the MNC’s applying the idea, publishing CSR reports as well.

With the inclusion of the Companies Act 2013, CSR was introduced and is promoting better transparency ever before. Schedule VII of the Act, which lists out the CSR activities, suggests communities be the focus. On the opposite hand, by discussing a company’s relationship to its stakeholders and integrating CSR into its core operations, the draft rules suggest that CSR must transcend communities and beyond the concept of philanthropy. It’ll be interesting to watch the ways within which this can translate into action at the bottom level, and the way the understanding of CSR is about to undergo a change.

Challenges faced by CSR in India

Several issues are challenging the effectiveness of CSR despite the fact that it has gained importance in India. There are many challenges faced by CSR like, no proper understanding of CSR, non-availability of authentic data, and specific information on the styles of CSR activities, coverage, and policy, etc. In addition to it, coaching and undeveloped staff are also creating problems that lead to a reduction in CSR initiatives.

  • Lack of interest of the Public in CSR activities: There’s an absence of interest of the area people in participating and contributing to CSR activities of companies. So, it must be checked and folks should be told the benefits of the identical.
  • Need to create local capacities: This initiative is way needed to make awareness at local levels and thus local capacities have to be built.
  • Lack of transparency: As per the varied surveys, it’s noted that transparency has been dead and hence has been very problematic. CSR needs to play the matter of transparency and switches this negative into positive,
  • Visibility factor: The role of media in highlighting good cases of successful CSR initiatives is welcomed because of its spreads good stories and sensitizes the local population about various ongoing CSR initiatives of companies.

Conclusion

The first and foremost advantage of CSR is that the transparency filter that has shown positive trends in India.CSR is absolutely about ensuring that the corporate can grow on a sustainable basis while ensuring fairness to any or all stakeholders, CSR has come a protracted way in India. It’s successfully interwoven business with social inclusion and environmental sustainability. From responsive activities to sustainable initiatives, corporate have clearly exhibited their ability to create a major difference within the society and improve the quality of life. Within the current social situation in India, it’s difficult for one single entity to motivate change because the scale is gigantic. Corporate have the expertise, strategic thinking, manpower, and money to facilitate extensive social change. Effective partnerships between corporate, NGOs, and therefore the government will place India’s social development on a faster track.

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