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Corporate Social Responsibility And Its Concerns


India has historically had a challenging ecosystem with difficult terrains all across the country, from the north to the south and east to the west. Equally challenging have been the diverse cultural heritage and habits in different areas and the socio-economic disparity between the different strata of society.

In the 21st century, as India finds its rightful place in the global scheme of things, emerging as a dominant player in various fields of science, technology, academics etc. and the world envies the intellectual prowess of our countrymen and our advancement in space technology, it is hard to believe that our rural brethren are so left behind that they still seem to be existing in the 19th century. This huge rural-urban divide is symbolic of a highly divided society of the haves and the have-nots, which is hugely responsible for various disturbances and caste conflicts.

In light of the above and to narrow the huge rural urban gap, the government endorsed a path breaking mechanism of rural and social upliftment in the form of CSR (Corporate Social Responsibility)

Why is “Corporate Social Responsibility” important for India?

“Corporate Social Responsibility” (CSR) is a self-regulating business model that helps a company to be socially accountable — to itself, its stakeholders, and to the public at large. By practicing “Corporate Social Responsibility”, also called “Corporate Citizenship”, companies can be conscious of the kind of impact they are having on all aspects of society including economic, social, and environmental. To engage in CSR means that a company is operating in ways that enhance society in a sustainable and responsible way.

India is the first country in the world to make “Corporate Social Responsibility” (CSR) mandatory, following an amendment to the Companies Act, 2013 in April 2014. Accordingly, business houses can invest their profits in areas such as providing rural healthcare, providing disease prevention, health education and eradication of poverty, gender equality, and hunger etc.

In India this program has become a huge success, as we all know Indian companies dedicated INR 9,309 crores on CSR projects in 2015-16, which was approximately INR 163 crores more than the amount required by law, and INR 703 crores more than the previous year.

Healthcare and education accounted for a bulk of the spending, with nearly 33.5% of funds going towards education and skill development programs, while 25.2% of funds were allocated to health and sanitation projects.

How does CSR benefit the corporate world?

CSR activities help to forge a stronger bond between employees and the corporation, boost morale and help both employees and employers feel more connected with the world around them. Also, the more visible and successful a corporation is, the bigger the responsibility to set high standards of ethical behaviour for its peers, competition, and industry.

Additionally CSR will contribute in the following ways:

  • Help to access finance; investors are more likely to back a reputable business house.
  • Help to attract positive media attention; taking part in community activities catches the eye of the media.
  • Help to get Positive Publicity.
  • Help to reduce regulatory burden; good relationships with local authorities can often make doing business easier.
  • Help to identify new business opportunities; for development of new products or services.
  • Help to attract more Capital Inflow from various sources or sectors.

Public perceptions and concerns

People feel that CSR is a game changer and can transform rural India if implemented in an organised way, in particular the health and education sectors.

  • People are concerned over the transparency and objectivity, since large business houses and corporates have their own foundations/trusts for CSR activities.
  • People fear that companies would increase the prices of their products and pass on their burden to the common man.
  • People want high priority rural areas to be identified, where funds are needed the most.

Dr Anantpal SinghDr Anantpal Singh is a leading physician, entrepreneur and health researcher from Spectrum Health Solutions Pvt. Ltd. Dr Singh envisions a global community with healthcare solutions which are simple to use and deliver better results than conventional methods.

Views of the author are personal and do not necessarily represent the website’s views.

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The CSR Journal Team