New development: Corporate philanthropy to mandatory corporate social responsibility (CSR)—A new law for India

Abstract

The Indian government’s corporate social responsibility (CSR) law is an attempt at formalizing the philanthropic activities of corporations and utilizing a fixed proportion of company profits for formal CSR activity. This article explains the brief history of this significant CSR regulatory development, its scope, compliance requirements and the penalties for the non-compliance focusing on public sector enterprises. It also provides insights into the potential impacts of the CSR regulation observed through post-regulation research studies. This article is directed towards lawmakers contemplating corporate social responsibility (CSR) legislation, as well as to the policy-makers and regulators in government agencies who are overseeing India’s new CSR law. In cases of non-compliance, penalties need to be levied for CSR legislation to be effective. Five years since its inception, this well-crafted law seems to be making a difference to Indian CSR spend targets, but it is too early to judge its real social impact.

Keywords Companies Act 2013 (India), Corporate social responsibility (CSR), Central public sector enterprises (CPSEs), India, philanthropy