Across the globe, India ranks first in formulating corporate social responsibility (CSR) binding and framing an example for the other countries. It was company’s choice whether to contribute in CSR activities or not before Companies Act 2013, But in April 2014, it has become compulsory for all the companies with the net worth of $70 million and above, or an annual turnover of $140 million and above or net profit of $699,125 and above, to endow 2% their average profit of 3 years towards CSR.
The company’s CSR activities could whirl in areas like education, gender discrimination, poverty, health etc. The preface of the modification changed the scenario now, formerly the companies had the prerogative to carry forward the remaining amount allocated for CSR to the next fiscal year, in addition to the amount allocated for that year. At present within 3 years the companies should contribute prescribed percent on CSR or else the remaining amount has to be deposited in one of the specified funds. The companies failing to execute CSR activity would draw monetary penalties ranging from 50, 000 to 25 lakh as well as imprisonment. This strict measure of the government has compelled the companies to satiate in CSR activities.
With the Indian business comprising in different social responsibility activities, the country is progressing in diversified dimensions. These activities would pave plan for the country’s societal and business enhancement. The survey carried on CSR by KPMG reports that the companies have spent about 7 536 crore from 2014 to 2018 which has shown a significant rise of 47 percent as compared to 2013.
Some Advantages of CSR activates to Businesses are it would gain enhanced public image, it would grab the customer’s attention, and eventually lead to improved business profit as well enhance environment in the company which will result in improved recruitment and retention of employees. The company’s participation in social responsibility eventually improves its productivity. It would also increase employee’s participation and provides better working conditions for their employees, minimize environmental impact, employee will consequently improvise their quality of work and productivity. These activities further improve the company’s financial performance which in turn will also give better competitive benefits through the company’s reputation, and brand value, draw more business partners and lead to successful business expansion. The organizations would also achieve wider approach to capital, which is not feasible without high CSR performance.
Few such activities carried out by some companies are Mahindra & Mahindra engage in education, health, and quality of life, and its CSR initiatives are ‘Rise for good,’ support youth, girls, and farmers. While, Bharat Petroleum Ltd has contributed to the country’s growth through its active involvement in the energy sector. Tata Motors Ltd.’s initiatives are mainly focused on health, education, and women empowerment. And ITC is associated in the agriculture sector.