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Corporate Social Responsibility (CSR) is the concept that was introduced in 2013 under the Companies Act, 2013. India is one of the few countries which have adopted the concept of CSRasincorporated under Section 135 of Companies Act, 2013. According to the United Nation Industrial Development (UNID), CSR means when a company achieves the balance of economic, environment and social importance and also fulfil the belief of stakeholders and shareholders.


Corporate Social Responsibility also known as Corporate Citizenship helps the company socially accountable to itself, stakeholders and public. CSR is referred to as a corporate initiative to take responsibility for the welfare of society and the environment. CSR is an idea according to which the companies need to invest socially and environmentally for the development of societies. CSR is based on the Triple Bottom Line Approach (TBL) which means that the companies need to promote commercial interest along with social responsibilities. This approach can help countries for developing their socio-economic growth and help them to become more competitive.


According to Section 135(1) of Companies Act, 2013, if a company fulfils any of these conditions in any financial year, they shall be required to constitute CSR committee:-

1) The companies having total assets of 500 Crore or more.

2) The companies having a turnover of 1000 Crore or more.

3) The companies having a net profit of 5 Crore or more.

The CSR Committee under S. 135(1) of Companies Act, 2013 shall constitute of 3 or more directors, out of which at least one director must be an independent director. According to Section 135(5) in every financial year, the company falling under above category shall spend at least 2% of the average net profit in CSR policy.


1) To create a guideline for the company to dedicate a percentage of the company’s profit for social projects.

2) To ensure the implementation of CSR initiatives through procedures and reporting.

3) It creates opportunities for employees to participate in social work.

4) It promotes education.

5) Ensures environmental sustainability.


1) It promotes gender equality, empowering women, setting up homes & hostels for women & orphans, setting up old age homes, day-care centres.

2) It helps in reducing child mortality and develops health by providing health care facilities.

3) It also develops employment enhancing vocational skills.

4) It protects the nature, plants, animals, species, and conservation of natural resources.

5) It also encourages rural development and slum area development.

6) It has a contribution to the Prime Minister National Relief Fund or any other fund set up by the Central Government for social welfare and socio-economic development.

7) It also helps to eliminate hunger and poverty.


1) Education The main focus of CSR policy is the development of education by the support of technical and vocational institutions. It also provides financial assistance for Primary, Middle and Higher secondary schools. CSR promotes education by conducting awareness camp for girl education and legal awareness.

2) Water Supply- CSR policy encourages water supply through the installation of hand pumps, tube wells, construction of water tanks, rainwater harvesting scheme and proper use of drinking water.

3) Health CareUnder CSR policies various camps for health care are conducted that give awareness on diseases like AIDS, TB, and leprosy. It considers the care of a child, mother, family welfare and senior citizens.

4) Environment- Under CSR the programs for the protection of the environment are also conducted. The policy gives financial assistance for the development of green belt, development of natural heritage and for plantation and animal care.

5) Social empowerment It includes the development of infrastructure, rural areas, electricity, water supply, agriculture, farmers and senior citizens. It assists villagers and framers for farming medical plants, and the development of land resources.


1) CSR improves the image of a corporation.

2) It increases the attraction and stability of employees.

3) It attracts more capital inflow from various sources.

4) CSR has positive publicity.

5) It leads to the development of societies and the environment


1) It increases the cost and workload burden on company resulting in implementation of long term plans and strategies.

2) It shifts the focus of private companies from their basic objective i.e. profit making, unlike public services.

3) Companies face the problem in production as the cost of production increases.

4) Heavy workload deteriorates morale of employees.

3) Shareholders interests seem to be varied resulting in their refusal.

4) The reputation of the company might suffer.


The Companies in India have huge fiscal resources, lack of proper knowledge of existing public problems and policy which resultsin misguided CSR efforts and do not help the public for a sustained period. It is claimed that only money cannot solve the social problems and corporate do not want to look beyond the fiscal measures to help the society.

As per section 135 of the Companies Act, 2013 2% of the net profit of a company shall be spent on social welfare. But the companies are not so transparent in declaring their net income. Companies which used to spend more than 2% before the law came into force, have started spending less these days.  As per the data, the companies have started spending in the selective CSR activities which benefit their brand value and do not spend those activities which will be actually beneficial for society at large.


1) The laws can work more efficiently with proper utilisation of specialisation and resources of companies.

2) CSR activities defined under schedule VII should be based on expert data.

3) Companies must collaborate with people and society on the ground. This will help the company to know the exact problems of people and society.

4) Companies shall also collaborate with specialist non-government institutions.


The policy of CSR was introduced in India for the development of society and environment. CSR in spite of all its good intention has failed to cover many grounds due to some policies there are faulty creations and procedure which do not match the CSR policy. The fudging of data, the self-serving CSR task or the short term of money spent are some of the main problems in CSR policy which need to be improvised for better results.