1

INTRODUCTION

".....in a free society, there's one and only one social responsibility of business - to increase
its profits."
- Milton Friedman
The general and clichd idea of business has always been to mint more and more money and
increase the shareholder value. Hence, corporations have mainly focussed on corporate
financial responsibility. However, in the last decade, a movement concerning wider corporate
responsibilities for the environment, for local communities, for better working conditions of
workers, and for ethical practiceshas gained pace. This agenda is known as corporate social
responsibility (CSR).
CSR is the implicit and unspoken commitment of businesses to make efforts for sustainable
economic development. Working with employees and their families, the local community
and society at large to improve their quality of life in ways that are good for business and
good for development is the theory of CSR. 1
The concept of Corporate Social Responsibility (CSR) evolved in the 1950s. The United
Nations played a significant role in the spreading the idea of CSR. The principle of corporate
responsibility has also been termed as strategic philanthropy, corporate conscience, corporate
citizenship, social performance and sustainable responsible business. 2 The concept of CSR
had different meanings depending on the stakeholder and that depending on the specific
situation and its forms differ according to the country or region. The term "corporate social
responsibility" came into common use in the late 1960s and early 1970s as a result of a book
by R. Edward Freeman, Strategic management: a stakeholder approach in 1984.

1 BALASUBRAMANIAM,N., CORPORATE BOARDS AND GOVERNANCE (1998).

2 Yasmin Begum R. Nadaf & Shamshuddin M. Nadaf, Corporate Social Responsibility: Issues
Challenges and Strategies for Indian Firms, 16 IOSR JOURNAL OF BUSINESS AND MANAGEMENT 5156 (2014).

WHAT IS CORPORATE SOCIAL RESPONSIBILITY?

There is no exact, water-tight universal definition of corporate social responsibility. However,

it generally refers to the transparent business practices that give due value to ethical values,
fulfil the legal requirements, and respect the people, communities, and the environment.
Thus, beyond making profits, companies are responsible for the totality of their impact on
people and the planet.3 Here, the term people constitutes the companys stakeholders i.e.,
its employees, customers, business partners, investors, suppliers and vendors, the
government, and the community. Today, more and more stakeholders are of the opinion that
companies should be responsible for the environment and society in which they conduct their
business. In the business community, CSR is also sometimes known as corporate
citizenship, which means that a company should be a good neighbour within its host
community.
The concept of CSR is also growing in the business community as well, with more and more
companies realizing that in order to stay productive, competitive, and relevant in a speedily
changing and fiercely competitive business world they have to become socially responsible.
Over the last decade, globalization and urbanization have removed national borders, and
technology has spurred time and shortened distance. Given this humongous transformation in
the corporate environment, companies want to expand their ability to manage their profits and
risks, and to save the reputation of their brands. Also, there is fierce competition for skilled
employees, investors, and consumer loyalty. A company's relation with the elements of the
society can hugely affect the sustainability of its business success.

BENEFITS OF CORPORATE SOCIAL RESPONSIBILITY

Corporate social responsibility (CSR) is an important function for the development of any
country. India, being a fast developing and the second most populous country in the world
needs to focus on more intensive efforts as part of CSR.

3 SIR GEOFFREY CHANDLER, DEFINING CORPORATE SOCIAL RESPONSIBILITY, ETHICAL PERFORMANCE BEST
PRACTICE (2001).

Benefits for Corporate:4

Improving financial performance;
Lowering the operating costs;
Positively improving the brand image and reputation;
Enhancing the sales and customer loyalty
; Increasing the productivity and quality;
Increasing the ability of the corporation to attract and retain employees;
Resulting in greater access to capital;
Benefits to the Community and the General Public:
Inflow of charitable contributions
Introduction of Employee volunteer programs
Increment in the corporate involvement in community education, employment programs
Environmental Benefits:
Increasing recyclability of materials;
Increasing the durability and functionality of products;
Better use of renewable resources;
Infusion of environmental management tools into business plans.
costing environmental management standards, and eco-labelling.
There are several positive ways in which companies have managed their CSR strategies and
are also reaping the benefits at the same time.

4 Dr.A.Jayanthi Chandrasekar, Corporate Social Responsibility - Issues and Challenges in India,

IJSRM 25-32(2014).

The Global Context

Although generally, the concept of CSR is embedded in philanthropic activities (consisting of
charity, donations, relief work, etc.) of corporations, globally, the concept of CSR has
matured and hence consists of all related concepts such as, corporate citizenship,
philanthropy, triple bottom line, strategic philanthropy, shared value, corporate sustainability
and business responsibility, among others. This is clear in some of the definitions presented
below:
The European Commission, (EC)5 defines CSR as the responsibility of enterprises for their
impacts on society. To completely meet their social responsibility, enterprises should have
in place 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
The World Business Council for Sustainable Development (WBCSD)6 defines CSR as the
continuing commitment by business to contribute to economic development while improving
the quality of life of the workforce and their families as well as of the community and society
at large.
According to the United Nations Industrial Development Organization (UNIDO)7, Corporate
social responsibility is a management concept whereby companies integrate social and
environmental concerns in their business operations and interactions with their stakeholders.
CSR is generally understood as being the way through which a company achieves a balance
of economic, environmental and social imperatives (Triple-Bottom-Line Approach), while at
the same time addressing the expectations of shareholders and stakeholders. In this sense it is
important to draw a distinction between CSR, which can be a strategic business management
concept, and charity, sponsorships or philanthropy. Even though the latter can also make a
5 http://ec.europa.eu/enterprise/policies/sustainable-business/corporate-socialresponsibility/index_en.htm(last accessed on March 25, 2015).
6 http://www.wbcsd.org/work-program/business-role/previous-work/corporate-social-responsibility.
aspx (last accessed on March 25, 2015) .
7 http://www.unido.org/what-we-do/trade/csr/what-is-csr.html#pp1[g1]/0/ (last accessed on March 25, 2015).

valuable contribution to poverty reduction, will directly enhance the reputation of a company
and strengthen its brand, the concept of CSR clearly goes beyond that.
The above definitions clearly indicate that:
1

1. The global approach to CSR is holistic and fused with the core business strategy for
addressing social and environmental impacts of businesses.

2. CSR needs to address not just the companys shareholders, but also the well-being
of all stakeholders.

3. CSR consists of a much larger set of activities other than just philanthropic
activities.

Global principles and guidelines

There are several globally recognised guidelines, frameworks, principles and tools, which
provide a suitable guidance for companies. The crux of most of these guidelines lies in the
larger concept of sustainability or business responsibility, in view of the fact that these
concepts are closely entwined with the global notion of CSR.
1. UNGC
United Nations Global Compact (UNGC) is the worlds largest corporate citizenship initiative
with the objective which aims for the promotion of sustainable and socially responsible
policies by businesses around the world. Several UN conventions such as the Universal
Declaration of Human Rights, ILOs Declaration on Fundamental Principles and Rights at
Work, the Rio Declaration on environment and development, and the UN Convention against
Corruption etc. have inspired the 10 principles of the UNGC. These principles cover four
broad areas i.e., protection of Human Rights, Labour Rights, Environment and working
against corruption in all forms of Governance.8

2. The United Nations Guiding Principles on Business and Human Rights

8 Handbook on Corporate Social Responsibility in India,

CONFEDERATION OF INDIAN
INDUSTRYhttp://www.pwc.in/assets/pdfs/publications/2013/handbook-on-corporate-social-responsibilityinindia.pdf(last accessed on March 26, 2015).

The UN guiding principles act as global standards for businesses and states to fulfil their
duties towards human rights and fundamental freedoms and also give methods to comply
with the existing laws. These guidelines also provide with some remedies, in case of
violations of these guidelines.
3. ILOs tripartite declaration of principles on multinational enterprises and social
policy
This is another voluntary declaration whose adoption by governments and multinational
organisations is encouraged for ensuring labour and social standards. This is specially
designed for organisations that operate across many countries.

4. OECD Guidelines: Multinational enterprises

They contain particular bench-marks for socially and environmentally responsible corporate
behaviour, and also contain procedures for settling disputes between corporations and
communities or individuals adversely impacted by business activities.
Apart from these, the Institute of Social and Ethical Accountability's AA1000 series of
standards and Social Accountability International's (SAI) SA 8000 Standard also serve as
useful tools for assessing CSR.

CSR in India
Evolution in India
India is a diverse country with a long tradition of philanthropy. In the earlier period, CSR was
based on the principles of philanthropy, religion and charity with the industrial families
establishing temples, schools and other infrastructure of public utilities aiming at social
consideration. Later, after industrialization, companies became conscious of the societal and
environmental problems in addition to their profit maximization. Therefore, now, the Indian
companies have started focusing on areas such as public health, education, livelihood, water
conservation and natural resource management.
Clearly, evolution of CSR in India has matured through the following approaches:

1. Ethical Model (1930 1950): This model was based on the concept of trusteeship. Under
this notion, the business entities were held by the firms as a trust in the interest of the
community. The efforts of Tata group particularly are worth mentioning under this model.
2. Statist Model (1950 1970s): This post independence period model was spurred by a
mixed and socialist kind of economy. The striking characteristic of this model was that the
corporate responsibilities were decided by state ownership and legal requirements.
3. Liberal Model (1970s 1990s): This model concerned itself with the idea of the famous
economic bottom line. Hence, it was sufficient for business to obey the law and amass
wealth, which could be forwarded for social ends through taxes and private charity.
4. Stakeholder Model9 (1990s Present): The 1990s emerged with this model with
corporations realizing that with growing economic profits, businesses also have certain
societal roles to do. Therefore, the business expanded their concerns from 1 P to 3Ps by
including people and planet in their profits, also famously known as Triple Bottom Line.

10

Hence, today, businesses focus on accountability and transparency via several mechanisms.
Therefore, CSR comprises philanthropic, corporate ethical, environmental and legal as well
as economic responsibility.
In contrast to the western concept of CSR, the notion of CSR in India still remains within the
philanthropic area, but has matured from core institutional building (such as educational,
research and cultural) to the development of community by way of various projects. Also,
with the influence of global organizations and with communities becoming more pro-active
and exacting, a trend has emerged that while CSR remains largely restricted to community
development, it is getting more strategic in spirit (that is, getting linked with business) than
philanthropic, and a large number of companies are reporting the activities they are
undertaking in this space in their official websites, annual reports, sustainability reports and
even publishing CSR reports.
9 Thomas M. Jones, Instrumental Stakeholder Theory: A Synthesis of Ethics and Economics, 20 THE ACADEMY
OF

MANAGEMENT REVIEW 404-437 (1995).

10
Corporate
Social
Responsibility

Towards
a
Sustainable
future,
https://www.kpmg.com/in/en/services/advisory/risk-compliance/documents/whitepaper%20on%20csr.pdf[] (last
accessed on March 26, 2015).

The idea of CSR came to the forefront with the introduction of the New Companies Act 2013,
which is encouraging better transparency. Schedule VII of the Act, while listing out the CSR
activities, makes communities the focal point of CSR. On the other hand, by discussing a
companys relationship to its stakeholders and infusing CSR into its main operations, the
draft rules suggest that CSR needs to go beyond communities and philanthropy. Hence, the
concept of CSR is set to undergo a change.

Stance in India
CSR under Companies Act 1956:
The Companies Act 1956 was silent about CSR. Still, companies used to make contribution
towards charitable and other funds under section 293(1)(e) of the said act, which were not
directly related to the company's business or its employee's welfare. It provided that
contribution could be made by a public company or a private company, being a subsidiary of
a public company , for an aggregate amount up to Rs 50,000 or five per cent of its average
net profit determined under sections 349 and 350 of said Act during the three financial years
immediately preceding whichever is greater. However, such private companies which were
not subsidiary of public company were free to contribute as per their own will.
The Companies Act, 2013
At present, in India, the concept of CSR is governed by section 135 of the Companies Act,
2013, which was passed by both Houses of the Parliament, and approved by the Indian
President on 29 August 2013. The CSR provisions within the Act is applicable to companies
with an annual turnover of Rs. 1,000 crore and more, or a net worth of Rs. 500 crore and
more, or a net profit of Rs. five crore and more. The new rules, which are applicable from the
fiscal year 2014-15 onwards, also require the companies to set-up a CSR committee
consisting of their board members, including at least one independent director.
The draft rules provided a number of clarifications, some the highlights are as follows:

Excess money coming out of CSR activities will have to be again invested into CSR
initiatives, and this will be over and above the 2% figure

The company could do CSR activities through any of the following methods:

-By directly on its own

-By way of its own non-profit foundation which is constituted as to facilitate this
initiative.
-By way of independent and registered non-profit organisations that have a record of
at least three years in similar such related activities.
4

-By amalgamating or pooling their resources with other companies.

The CSR activities held in India only will be considered.

Such activities concerning only the employees and their families will not qualify.

Further, a detailed format for the board report on CSR has been provided which
includes amongst others, activity-wise, reasons for spending amount less than 2% of
the average net profits of the previous three years and a responsibility statement that
the CSR policy, implementation and monitoring process is consistent with the
objectives

of

CSR.

The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of
the Companies Act 2013, along with the provisions of the Companies (Corporate
Social Responsibility Policy) Rules, 2014 to come into effect from April 1, 2014.
These obligations generally come in the form of mandatory funds which companies
must contribute to solve social problems.11
Entities Covered by the CSR Obligations
Companies would be involved in CSR, if they have, for any financial year:
-a net worth of at least Rs. 500 crore; or
-a turnover of at least Rs. 1,000 crore; or
-net profits of at least Rs. 5 crore.
Companies which meet these criteria are supposed to make a CSR policy, contribute a
minimum amount on CSR activities and report \these activities, or explain why they didn't.
11 http://www.dpemou.nic.in/MOUFiles/Revised_CSR_Guidelines.pdf(last accessed on March 26, 2015).

Required Amount of CSR Spending

Any business which fulfils the above criteria is supposed to spend not less than two percent
of its average net profit for its preceding three financial years, on CSR. The net worth,
turnover and net profits are to be computed according to Section 198 of the 2013 Act. It has
been stated that if net profits are computed under the Companies Act, 1956 they need not be
again calculated under the 2013 Act. Profits which are coming from any overseas branch of
the company would not be included in the calculation of net profits of a company. Moreover,
dividends which are received from other companies in India which are supposed to comply
with the obligations of CSR would not be included in the calculation of net profits of a
company.12
Permitted CSR Activities
There are many activities which are permitted for CSR. These include such purposes as
eradication of hunger and poverty; promotion of public health; promotion of education;
negation of gender inequality; protection of the environment; and consistent efforts to fund
cultural initiatives and the arts.
All CSR money must be spent in India. The New Act suggests companies to spend their CSR
funds in the locations where they operate. Importantly, funds cannot be spent on activities
that are part of the normal course of the companys business or on projects for the exclusive
benefit of employees or their family members.
Contributions of any amount of money to a political party are not permitted as a CSR activity.
However, there is an exception, which allows companies to use their CSR funds to support
development projects which are initiated by the prime minister or the central government.
CSR Committee
The companies are required to appoint a Corporate Social Responsibility Committee which
should have at least three directors. If a company is one that is required by the New Act to
appoint independent directors to its board, then the CSR committee must include at least one
independent director.
Governance

12http://www.jonesday.com/Indias-New-Corporate-Social-Responsibility-Requirements--Beware-ofthe-Pitfalls-04-15-2014/ (last accessed on March 27, 2015).

Section 135 lays some guidelines to be followed by companies while developing their CSR
programme. The CSR committee has to prepare a detailed plan on activities concerning CSR,
which would include the expenditure, the type of activities, roles and responsibilities of
various stakeholders and a monitoring mechanism for such activities. It can also ensure that
all the kinds of income accrued to the company by way of CSR activities should be credited
back to the community.
1

Administration of CSR Projects

A company can meet its CSR obligations by way of a third party, such as a society, trust,
foundation or a company with charitable purposes etc. which has an established record of at
least three years in CSR-like activities.
Reporting Requirements
The Act requires companies to prepare a detailed formatted report, about the companys CSR
policy, the members of the CSR committee, the amount of money spent on CSR, and the
details of specific CSR projects. A companys board must include this report in its annual
report to shareholders and publish it on the company's website. The report must also include a
statement from the CSR committee that the implementation of the boards CSR activities is
fulfilling the CSR objectives and policy of the company.
Failure to Comply
If the required amount is not spent on CSR then the board is required to state with reasons in
its annual Directors Report to the shareholders. However, there's still ambiguity as to
whether failure to comply is a legal offense of any sort. However failure to explain noncompliance is a punishable offence under the New Act.
Holding-Subsidiary Enterprises
The CSR Rules appear to widen the ambit for compliance obligations to include the holding
and subsidiary companies as well as foreign companies whose branches or project offices in
India fulfil the specified criteria. However, there is a need for clarity with respect to the
compliance obligations of a company as well as its holding and subsidiary companies.

Tax Implications
There is a myriad of cases, where the Indian courts have discussed the issue that whether
expenditure incurred as a CSR activity would be allowed as a deduction under section 37(1)
of the Income tax act 1961 or not. It has been held in a variety of cases that if the expenditure
is spent on advancement of taxpayers business, it is allowed as business expenditure.
In the case of CIT v Madras Refineries Ltd13:
The Madras High Court said: The concept of business is not static. It has evolved over a
period of time to include within its fold the concrete expression of care and concern for the
society at large and the people of the locality in which the business is located in particular.
Being known as a good corporate citizen brings goodwill of the local community, as also with
the regulatory agencies and the society at large, thereby creating an atmosphere in which the
business can succeed in a greater measure with the aid of such goodwill. Monies spent for
bringing drinking water as also for establishing or improving the school meant for the
residents of the locality in which the business is situated cannot be regarded as being wholly
outside the ambit of the business concerns of the assessee, especially where the undertaking
owned by the assessee is one which is to some extent a polluting industry.
Therefore, in this case, the funds which were given for establishing drinking water facilities
and providing aid to school meant for residents of the locality in which the taxpayer operated
were allowed as deduction.
A similar view was taken by the Karnataka High Court in the case CIT v. Infosys
Technologies Ltd14, where the court held that just because the general public reaped the
benefits by the said expenditure, it does not mean that the said expenditure would not be
allowed as deduction u/s 37(1) of the Act. In view of the above decision, it is clear that if the
CSR activity is done in advancement of business of the assessee, then said expenditure could
be allowed u/s 37(1) of the Act. Section 135 of the Act states that corporations have to spend
at least 2% of the average net profits of the company made during immediately preceding
three financial years for CSR. However, this does not mean that it is a statutory charge

13 266 ITR 170 (Mad).

14 (2014) 360 ITR 714.

against the gross income. On the contrary, CSR expenditure is also treated as an appropriation
of net income. Therefore, there is lack of clarity on the same.
Hence, there have been court decisions which discussed the nature of CSR expenses and held
them to be deductible on case to case basis. Finance (No.2) Act of 2014 gave a new
Explanation to Section 37(1) clarifying that any expenditure incurred by an assessee on the
activities relating to CSR referred to in S.135 of the Companies Act, 2013 shall not be
deemed to be an expenditure incurred by the assessee for the purposes of the business or
profession. This amendment will take effect from 1st April, 2015 and will, accordingly, apply
in relation to the assessment year 2015-16.
This amendment however, is a serious concern and may defeat the objective for which CSR
was statutorily incorporated .i.e., for the holistic development of the society and environment.
The disallowance of tax on CSR expenditure encourages corporate to do activities for which
they can get maximum tax benefits in form of deductions or exemptions.
CSR AND SMEs
The Companies Act, 2013 is also likely to bring in many SMEs into the ambit of CSR, by
requiring companies, with a minimum net profit of Rs. 5 crore, to spend on CSR activities,
However, there are some problems which for SMEs may face in this context:15
1. The cost of CSR activities may be too much for such SMEs; 2. CSR activities often do not
provide benefits in the short run due to the lack of awareness of the business benefits. 3.
Another fact is that the existing CSR tools are mainly concentrated towards large business; 4.
The biggest hurdle for SMEs seems to be bureaucratic burden and red tapism.
However, by introducing the concept of collaboration for undertaking CSR activities,
government has made it a bit easier for SMEs to overcome these problems.

An Analysis:
The CSR provisions embedded in the Companies Act, 2013, is indeed a huge and
commendable step undertaken by the Indian government, however a closer analysis of these
15CA. Sanjay Kumar Sharma, A 360 degree analysis of Corporate Social Responsibility (CSR) Mandate of the
New Companies Act, 2013, 3 GLOBAL JOURNAL OF MANAGEMENT AND BUSINESS STUDIES 757-762 (2013).

provision bring to the several lacuna which are present in the act. Some of them have been
discussed below:
1. On one hand, while the Companies Act states certain methods for the computation of net
profits and the CSR contribution, the CSR rules give certain exclusions from the net profit so
computed. The most significant among these is the exclusion which provides that the profits
of a branch of an Indian company which is located outside India cannot be infused into the
profits of the parent company for the purpose of calculation of the two per cent contribution.
However, ironically, this exclusion is not consistent with the spirit of Section 135 and hence
seems to be ultra vires, to that extent.
2. Also there is confusion with regard to the meaning of the words 'corporate social
responsibility'.
3. Another problem is with regard to the clause of local area preference. There is confusion
that what would the local area if a company has more than one operational office in the same
city or whether the local area should be that of the factory or the registered office or any other
place.
4. Also, according to the Companies Act, 2013, CSR activities mean an identified set of
activities, which are set out in the separate schedule of the Act. But, the definition in the rules
suggests that the list of CSR activities provided in the rules is only illustrative and not
exhaustive. At the same time, an overall reading of the rules hints that the scheduled activities
only will be termed as CSR. Whether or not social activities which fall outside the ambit of
the schedule are a part of CSR activities, is doubtful. Besides, the specific activities do not
give any freedom to companies to choose their CSR activities and therefore, may be forced to
undertake an activity which may not give the desired outcome.
5. Also, the fact whether the activities undertaken by a company primarily but not exclusively
for the benefit of its employees should be considered as CSR activity is questionable.

6. Moreover, on a deeper thinking, one may realize that companies already pay tax on 1/3 of
their profits every year. They also pay wealth tax of 1% of their taxable net wealth. Moreover,
big companies like TATA, ITC, Wipro etc. make immense voluntary contributions towards

the welfare of the society. However, by asking companies to spend 2% of average profits
made during immediately preceding three financial years on CSR activity, it may be difficult
for companies with lesser profits.
According to a report of the World Bank on ease of doing business every year, Indias rank
was 132nd in 2013. The report of 2014 places India at 142 nd position which implies that
conducting business in India has even difficult than it was before. Now, by forcing companies
into mandatory CSR activities, the business scene in India may dip further.
7. Also, by not allowing expenditure spent on CSR activities u/s 37 of I-T Act, there is a case
of differential tax treatment and hence it has lead to the companies preferring to spend on
specific CSR amount on areas where tax exemptions are available. Omission of Explanation
(2) to Section 37 of the act may solve this issue.16
8. In case of NGOs, it may be noted that some Indian NGOs do not have a formal framework,
thus, making it difficult to monitor their expenditure on CSR. Also, since funds to political
parties are not a part of CSR expenditure, therefore, companies in the garb of doing CSR
activity through an NGO may contribute to political parties and accrue benefits and lead to
misappropriation of the funds.
Hence, though these statutory provisions are much needed in the present day society, yet we
need certain clarifications on this behalf.

Suggestions
Though there were several practical hurdles in the initial phases of the implementation of the
new CSR provisions, yet the steps taken by the government are indeed appreciable. The new
provisions show the paradigm shift in the concept of social responsibility of the corporations,
whereby corporations are seen to be more responsible for the society, environment and
people, from whom they reap their benefits from.

16 Ramesh K. Vaidyanathan & Pooja Thacker, The New CSR Rules: Confusion or Clarity, BUSINESS TODAY,
March 18, 2014.

1. However, to make sure that CSR complies with the true spirits of the new CSR law, there
is a need for a team which is efficient, professionally competent and independent. This would
be possible only when companies join hands to work for a common goal of public good.
There is also a need for an expert and trained team of professionals, who can manage the
funds which are set for CSR .
2. There should be initiatives for increasing the general public awareness about the ever
growing concept of CSR.
3. Since the concept of CSR includes all the elements of the community at large, it would be
advisable to foster partnerships between all stakeholders which includes the private sector,
employees, local communities, the Government and society.
4. The government should make an effort to expand the CSR initiatives effectively to small,
medium and large corporate houses, without over-burdening them.
5. There should be real efforts to start CSR initiatives and programmes in urban areas and
localities and to try to bring about some real change in these areas.
6. There should be increased pro-active involvement of the Corporate houses and NGOs and
they should pool their resources and create synergies to develop best CSR practices to bring
about new innovative projects and reach out to more beneficiaries.
7. A very significant step would be for the government to start recognizing and rewarding the
corporate houses/NGOs and their partners in proper implementation of projects for the poor
and the underprivileged.
8. There should be enhanced partnerships between the Government and other interest groups
at all levels in order to facilitate common strategies for converting policies into workable
action programmes.
9. There should be more focus on the non- conventional issues like, disaster management,
green marketing, ethical practices, etc., and other social and community relevance issues
10. Efforts should be made to underline the policy documents of the government in order to
ensure the co-operation of the public in planning process of CSR initiatives.
11. Efforts should be made to popularize innovative models among corporate in these areas.

12. It is recommended that realistic and operational models should be jointly explored and
addressed by various corporations, to facilitate the development agenda in a mission mode.
Also, since there is a huge number of giant corporations which may be involved with funds
amounting to thousands of crores of rupees, it will a better idea for the government that
instead of fixing responsibility of spending by individual companies, the government should
promote the creation of a common corpus, which should be managed collectively by
competent professionals to be nominated by the participating corporations. The capital and
money involved may be invested in risk free securities and the income from such investments
may be used for greater social welfare, thus facilitating over-all growth of the country.
Hence, it is hoped that with better and clear statutory provisions and better participation of
the corporations and community at large, the concept of CSR will positively lead India to its
new and dynamic growth story.

CONCLUSION
"Everything is connected to everything else" - this is often called the First Law of Ecology
and this principle truly applies to the closely knitted world we are living in today. Conducting
and prospering in businesses today requires recognizing the importance of living in balance,
peace and harmony with our physical environment and also treating our fellow human beings
with dignity and equity. Since we live in a society, where globalization has dissolved
distances and technology has erased boundaries, we all are connected to each other. Hence,
we can no more ignore the concept of CSR because even businesses cannot be successful if
the society around them fails.
Despite the complexities and glitches which may be involved with CSR, the world is in dire
need of this concept. However, more than just the idea of CSR, what's more important is its
effective implementation. With more and more corporations realizing the increasing role they
play in the society and the deep and long lasting impact of their activities, proper coordination and well spread awareness about CSR is truly the need of the hour. However, it is
not easy for one single entity to bring about a magnanimous change, as the scale is
humongous. Hence, the corporations should join hands and work together by including other
public welfare organizations to truly make a greater impact and a positive and a noticeable
change.

Importantly, the concept of CSR must not be accepted hesitantly and unenthusiastically.
Instead, it must be practiced with better planning, full passion and with an aim to truly
achieve the objectives which are set out in the statutory provisions. The aim of the companies
should be to work selflessly and make an impact. This definitely helps the companies in the
long run and also the society and the environment in a meaningful manner. It would be apt to
conclude with the views of William Ford Jr., Chairman of Ford Motor Co.:
"A good company delivers excellent products and services, but a great company does all that
and strives to make the world a better place."
CSR and Morality
The concept of CSR derives its power from the principle of morality. The ancient Indian
philosophy was that the basis of all systems rests upon the goodness of men. It also suggested
that morality and purity were the only strengths of human beings. These life giving ethics or
dharmas can show us a more suitable way to resolve the daily inner conflicts in our minds.
Hence CSR can be used as an effective tool to solve the inequalities existing in our society.
The concept of CSR is based on these universal ethics of morality. The morals that all people
should be treated equally, conservation and respect for our environment, the rich should help
poor and the strong should protect the weak etc., all these are the principles which have been
a part of our culture since long. The concept of CSR merely infuses these principles in a
modern manner with a view to attain sustainable development. Hence, CSR involves the
same old principles of morality, but with a modern approach. For example unlike earlier
times, when charity was supposed to be done secretly, today charity done by way of CSR is
also used as an effective tool for the promotion of companies and enhancing the brand image
and depicting it in a positive light. So companies are not expected to leave their primary
agenda of profit maximization and indulge in charitable works, but under the concept of CSR,
they are encouraged to involve the community and the environment in their profits and help
in the development of the society along with their development. Therefore, the corporations
are expected to hold the hands of the community and lead and guide them to the road to
development because it is the community from whom the companies make their profits.