Abstract:

In recent years we have seen great interest among researchers on Corporate social
responsibility, as a result it garbed increased notice as a means for sustainable
development. India is the first country to legally mandate specific spends on CSR for
all the corporate firms based on the profit, or income, or net worth criteria following an
amendment to the Companies Act, 2013 in April 2014. The Act also stipulates the
activities and areas that would be eligible for the said purpose. My thesis sheds light on
the subtleties of section 135 of India’s Companies Act, 2013 which relates to CSR and
explains the criteria for the companies to contribute two percent of their average net
profit in the past three years. In case of violation by firms for failing to contribute the
mandated amount, the board requires them to provide the reasons and basis to validate
their stance. This thesis also aims to analyze the impact that the mandatory CSR
regulation may have on companies CSR Spending. Analysis of the CSR scenarios in
India prior to and post 2013, the year in which legislation was passed. I have further
discussed the drivers and barriers to CSR spending. Primary data collection through
brief interview with the expert and collection of data from the surveys and databases
such as Companies Act of 2013, Ministry of corporate affairs websites, National CSR
portal, and the Indian Institute of corporate affairs. Using above-mentioned approaches,
I have reached a conclusion that there is a significant increase in CSR activity among
the firms affected by Section-135.


Keywords: Corporate Social Responsibility, Companies Act, 2013; India, Mandatory
CSR, CSR Effectiveness, Covid-19, Motivations, Challenges.

Contents

Abstract
Acknowledgement

Chapter 1: Background...................................................................................................................1
1.1 Introduction ................................................................................................................................1
1.2 Evolution of CSR.........................................................................................................................2
1.3 Regulations of mandated CSR in India .............................................................................4
1.4 Parliamentary discussion on the bill ................................................................................11
1.5 The problematic angle of CSR legislation ......................................................................12
1.6 Research Questions.................................................................................................................15
1.7 Research Methods ..................................................................................................................15
1.8 Roadmap ....................................................................................................................................15

Chapter 2: Literature Review………...………………………………………….................................…17
2.1 Definition of CSR......................................................................................................................19
2.2 Different Theories …………......................................................................................................20
2.2.1 Modernist view on social responsibility……………………………………...................….20
2.2.2 The Stakeholder Theory of CSR……………………………………………….........................22
2.3 Carroll's pyramid of CSR ......................................................................................................23

Chapter 3: Effectiveness of Mandated CSR….......................................................................30
3.1 Impact of Section-135 on CSR expenditure..................................................................30
3.2 Firms explanations for not expending on CSR activities..........................................34
3.3 Top ten firms CSR contributions........................................................................................35
3.4 Sector-wise CSR spending’s in India.............................................................................37
3.5 State-wise CSR expenditure in India................................................................................39

Chapter 4: Mandated CSR: Motivations and challenges.................................................41
4.1 Drivers of CSR ..........................................................................................................................41
4.1.1 Supporting internal market.............................................................................................41
4.1.2 Setting up good image of the firm...............................................................................42
4.1.3 Global expansion through CSR .....................................................................................42
4.2 Barriers of CSR .........................................................................................................................43
4.2.1 Unwillingness of top leadership.....................................................................................43
4.2.2 Shifting the culture of the organization to incorporate CSR...............................44
4.2.3 Strengthening CSR capability......................................................................................... 44

Chapter 5: Findings / Results......................................................................................................46

Chapter 6: Conclusions.................................................................................................................53

References………………………………………………………………….......................................………...57

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