Abstract
The present study is an attempt to understand the historical development of corporate social responsibility in India. The present study classified the development of corporate social responsibility in five different phases as phase of individual philanthropy, phase of social movement philanthropy, phase of state philanthropy, phase of corporate philanthropy, and finally CSR Law in India. The present study has also highlighted corporate social responsibility violations and penalties associated with. The study analyzed the major challenges in corporate social responsibility implementations in India. The study adopted doctrinal and archival research methodology. The findings indicate that there has been an increase in CSR activities because it has been made compulsory by the law. However, the challenges are still there such as local communities disapproving of firms supporting CSR initiatives due to lack of knowledge and public awareness, businesses being dissatisfied with local agencies' transparency, and lack of funding, etc.
TopBackground
Development of CSR in India
“Corporate Social Responsibility” originates from the boundary between the realm of knowledge and the realm of uncertainty. Kotchen and Moon (2007)
The development is divided into five phases. Each of phases has contributed to the development of numerous CSR concepts that align with the nation's historical context. Nevertheless, there are variations between the stages, and characteristics from one phase to another.
The First Phase (Individual Philanthropy)
Initially, philanthropy and altruism were the primary motivations behind CSR. Corporate social responsibility has been influenced by factors such as industrialization, family values, religion, society, and tradition. Wealthy individuals during the pre-industrial era (1800-1855) constructed temples for religious purposes and allocated a portion of their wealth for the benefit of the public. During the time, social and economic factors exerted significant influence on industrial dynasties like as the Birla, Singhania, Modi, Bajaj, Tata, and Godrej families. (Tilt, 2009)
The Second Phase (Societal Movement Philanthropy)
The struggle for independence, Indian manufacturers faced increasing demands to demonstrate their commitment to societal improvement. “Mahatma Gandhi” (Indian independence activist and leader) propagated the concept of “trusteeship,” advocating that business magnates should utilize their influence to improve the world. (Khanna and Palepu, 2005)
Due to his influence, businesses facilitated the establishment of training and study facilities, as well as endowments for schools and colleges. The trusts primarily operated their enterprises in accordance with Gandhi's measures that aimed to advance rural development, empower women, and end untouchability.
Key Terms in this Chapter
Board of Directors: a collective body of independent.non-independent and other directors of the company)
Philanthropy: Charitable help in return of consideration
Altruism: moral obligation to serve others
Companies act 2013: The Act consolidates and amends the law relating to companies
CSR: Corporate social responsibility is a business model that helps a company be socially accountable to itself, its stakeholders, and the public.
Transnational Corporations: TNCs, i.e a company operating in more than one country
Public Sector Undertakings: (PSUs i.e. brought in 1956 to develop infrastructure and economy in India
Globalisation: An interdependence of the world’ economics, culture etc.
Ethical Standard: The principles that promote trust, good behavior, fairness and governing the conduct of a person
“Trusteeship”: an idea that people should be satisfied with what the god has given to them: ensuring equal distribution of wealth in the society
Directors: Oversees the management of the CSR activities)
CSR Committee: A committee involved in allocation of funds for CSR activities