Corporate Social Responsibility- A Business Accelerator for Inclusiveness

1. Introduction

A large number of countries have decided to concentrate their policies on becoming entrepreneurship a generator of socioeconomic progress, and as a result, the private sector has produced growth rates, wealth, and profits that were previously unthinkable. Corporate offices increasingly dominate the skylines of major cities and, in advanced nations, have superseded religion as the new places of worship by putting the industry at the center of national concerns. Many national and regional governments are paralyzed by their debt loads, lack of revenue sources, increased civic obligations, and growing public anger and mistrust while having enabling laws and infrastructure funding that benefit the expanding private sector. While the state has historically been tasked with providing for the necessities of society, corporate power undermines and puts pressure on this responsibility. dividing up duties between the government, its people, and raise significant issues regarding who is accountable for what and for whom?

Studying the shifting inter dependencies between politics, business, and society is the goal of political CSR. In general, the topic may be separated into top-down laws and regulations and bottom-up political procedures that validate corporate behavior. The majority of the study on political CSR focuses on bottom-up procedures linked to the expansive and growing role of business as corporations take up societal obligations formerly held by the government. Initiatives to eradicate poverty, create and maintain infrastructure, or provide access to healthcare, education, and various other services are a few examples. Three characteristics serve as the foundation for this version. The acceptance of proactive responsibilities at the bottom up initially appears as something that's inherently optional. In this sense, accepting community or governmental obligations is seen as a means of gaining political favor or evading control.Second, it is believed that governments constrained by fiscal constraints are becoming more and more unable to fulfill their obligations without the support of the corporate sector. In situations where national governing mechanisms are ineffective, unstable, or nonexistent, firms fill this void. Finally, and as a result, engaging in politics CSR is strategically advantageous for businesses since doing so secures access to markets and a friendly regulatory environment in circumstances in which they have grown to be the most powerful players.

General Terms 

CSR is based on the principle that companies should give back to society as they prosper and expand. Companies draw resources from the community in the shape of industrial goods, human resources, etc. Businesses are contributing to society by engaging in CSR initiatives. CSR is neither charity nor only giving money, as is sometimes believed. CSR is a method of doing business that enables corporate organizations to directly benefit society.

CORPORATE SOCIAL RESPONSIBILITY AND COMPANIES ACT, 2013 

Companies Act, 2013 [“Act”] is a legislation which officially embarked on one of the world’s largest experiments of introducing the concept of CSR as a mandatory provision. With the introduction of new Act, there is a statutory obligation for the corporates to take initiatives towards Social, Environmental and Economic Responsibilities. The initiatives taken have to be reported to the company and other stakeholders appropriately.

Section 135 of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014 [“CSR Rules”]framed thereunder govern CSR in India. The detailed provisions are explained below:

 Definition of CSR

The Act does not define the term CSR. As per rule 2(c) of the CSR Rules “Corporate Social Responsibility means and includes but is not limited to:

 (i) projects or programs relating to activities specified in Schedule VII of the Act; or 

(ii) projects or programs relating to activities undertaken by the board of directors of a company (Board) in pursuance of recommendations of the CSR Committee of the Board as per declared CSR Policy of the company subject to the condition that such policy will cover the subjects enumerated in Schedule VII of the Act.” 

APPLICABILITY 

Section 135 of the Act provides for the applicability of the CSR provisions on corporates. Sub-section (1) of section lays down that every company having 

• net worth of Rs. 500 Crore or more; or 

• turnover of Rs. 1000 Crore or more; or 

• net profit of Rs. 5 Crore 

during any financial year shall be required to constitute a CSR Committee of the Board consisting of three (3) or more directors, out of which at least one(1) director shall be an independent director. 

Rule 3 of the CSR Rules specify that every company which ceases to be a company covered under section 135 as per the limits specified thereunder for three consecutive financial years shall not be required to constitute a CSR Committee and comply with the provision of section 135, till such time that it meets the criteria specified.

Conclusion

The obligations that regional firms have to the general public and to the country are outlined under corporate social responsibility. It is essential to additionally promote the concept of "individual social responsibility." In the end, society is held responsible for all of the deeds and omissions.

Corporate social responsibility is just about going beyond profits. There are still many issues to be solved even though India was the first country in the world to have legislative compliance that is required for corporate social responsibility spending. Working together, the government, industry, and society can only overcome these obstacles. Similar circumstances exist in other countries, where effective execution of corporate social responsibility necessitates the creation of a framework.