Understanding Corporate Social Responsibility: Exploring its Applicability in India

Introduction to Corporate Social Responsibility (CSR)

In the dynamic landscape of global business, Corporate Social Responsibility (CSR) has evolved into a pivotal strategy, and India is swiftly embracing this positive change. As businesses acknowledge their role in societal and environmental well-being, CSR activities are taking center stage in the Indian corporate realm. Whether you’re a seasoned professional, a CSR enthusiast, or just curious about how companies can foster positive change, this blog is your comprehensive guide.

Decoding CSR: A Self-Regulating Business Model

CSR is a self-regulating business model designed to make companies socially accountable to themselves, stakeholders, and the public. Its primary aim is to enhance a corporation’s social standing, cultivate customer loyalty, and boost sales.

The CSR is applicable if the company meets the following criteria under Section 135 of the Companies Act, 2013:

1. Net worth of 500 crores or more, OR
2. Turnover of 1000 crores or more, OR
3. Net profit of 5 crores or more in the immediately preceding financial year.

The provisions contained in the Companies (Corporate Social Responsibility Policy) Rules, 2014, and Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 shall also apply to the above-mentioned companies. The CSR provisions, if applicable, remain effective for a period of three financial years.

Every company to which the provisions of Section 135 apply shall spend at least 2% of the average net profits made during the three immediately preceding financial years.

Key Areas of CSR Applicability in India

India’s unique socio-economic landscape offers ample opportunities for CSR initiatives. Businesses operating in the country can make a substantial impact on its development while ensuring their own sustainability. The permissible corporate social responsibility examples given in Schedule VII of the Companies Act, 2013 are as follow:

1. Eradicating Poverty & Hunger
2. Reducing Illiteracy & Promoting Education for All
3. Gender Equality & Women Empowerment
4. Combating HIV, AIDS, Malaria, and Other Diseases
5. Environmental Sustainability
6. Enhancing Vocational Skills
7. Contribution to the Prime Minister’s National Relief Fund or Any Other Fund Set Up by the Central or State Government.

Best CSR Companies in India

Despite challenges, many Indian companies are actively engaging in CSR activities. In the fiscal year 2021-22, 1,205 listed companies obligated to spend under the law collectively invested ₹14,801 crore in CSR. Below are the companies with good corporate social responsibility that are known for their Notable leadership in this movement:

1. Reliance Industries Limited: Surpassing its obligation, Reliance spent Rs. 1186 crores on CSR initiatives.
2. Tata Consultancy Services Limited: Exceeding requirements, TCS spent Rs. 727 crores on CSR.
3. HDFC Bank Limited: Committed to social responsibility, HDFC Bank spent Rs. 736.01 crores.
4. ICICI Bank Limited: Contributing to social causes, ICICI Bank spent Rs. 266.62 crores.
5. Infosys Limited: Demonstrating commitment, Infosys invested Rs. 344.91 crores in CSR programs.

Strategies for Effective CSR Implementation

To seamlessly integrate CSR into business practices, every company requires a corporate social responsibility strategy. Companies must establish a CSR Committee as per the Companies (CSR Policy) Rules, 2014. This committee plays a pivotal role in deciding where CSR funds should be allocated. Aligning CSR activities with company goals is crucial. Whether through scholarships, volunteering, training, or donations, companies can make a meaningful impact.

Collaborating with NGOs is an effective way to streamline these activities. India has over 33 lakhs NGOs and these NGOs has their own focus area and demographics they serve on. Wondering how to find the correct NGO that fits your organization. No worries! Skopick.com helps you by identifying the right NGO that aligns your cause.

Skopick.com: Transforming CSR Ideals into Impact

Skopick.com facilitates the transformation of CSR ideologies into real-time impact. With a robust verification process, Skopick.com onboards verified NGOs, helping companies track and monitor the progress and impact of their CSR initiatives. To learn more about Skopick’s impact tool, visit https://www.skopick.com/csrimpacttool

Conclusion – Paving the Way for a Better Future

In conclusion, CSR is gaining momentum in India, with businesses recognizing its significance and incorporating it into their strategies. Government initiatives, such as the Companies Act, 2013, further encourage and regulate CSR activities. The future of CSR in India holds great promise, with the potential for lasting positive impacts on both society and business. It’s time for Indian businesses to prioritize CSR, contributing to the creation of a better future for all.