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Corporate social responsibility in India: Issues and challenges

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DOI: 10.5958/0976-173X.2019.00007.1

Corporate Social Responsibility in India: Issues and challenges

Rabinarayan Samantara and Shivangi Dhawan

ABSTRACT
It is rightly said that “It is easy to dodge our responsibilities, but we cannot dodge the consequences of dodging
our responsibilities.” - Josiah Charles Stamp, 1880-1941, former director of the Bank of England. In this
modern digitalized world, businesses are required to be mindful both in terms of what they are doing and how
they are doing it. The company’s brand is not just dependent on the quality of products they are offering to
people but on the overall impact of the company’s operations on the society, environment and the economy.
Their sense of social responsibility provides them with a competitive edge over their competitors in a crowded
marketplace. CSR is a holistic and integrated management concept whereby companies integrate their social
and environmental objectives with their business objectives. It works on a Triple Bottom Line Approach i.e.
Company focuses on 3P’s; People, Planet & Profit while addressing all the expectations of its stakeholders. The
majority of policy initiatives in the country are driven by the objectives of equal opportunities, minimizing
poverty and human deprivation, focus on fundamental rights, etc. thereby leading to strong human development.
The choices that we make today will be going to affect and influence our future generations. Despite all this
inequality and disparity still exists. This year, the Indian Government implemented new CSR guidelines. These
guidelines require Indian companies to spend 2 percent of their net profit on CSR. India is the first country in
the world to make CSR mandatory. Including the CSR mandate in Companies Act, 2013 is a great step of
engaging the corporate sector in the equitable development of the country. Earlier companies were required to
spend 2 percent of the profits towards CSR and in case of failure to do so; they were required to give reasons.
But as per the present amendment, companies are required to spend 2 percent of profits towards CSR in the
given time limit or are required to turn over this amount of profits in the funds which are run by the government.
The new amendment will require all the companies which qualify the provisions under CSR guidelines to spend
the specified part of their profits towards Corporate Social Responsibility without failing. In this paper, researchers
have made an attempt to study Issues and Challenges associated with CSR in India and also to determine
various factors driving CSR practices in Indian Companies.
Keywords: CSR, Corporate, Society, Environment, Triple bottom line, Sustainability, Social responsibility
JEL Classification: M14
Biographical Note: Rabinarayan Samantara is currently working as Associate Professor in Commerce, Shivaji
College, University of Delhi. He can be reached at [email protected]
Shivangi Dhawan is working as Assistant Professor in Commerce, SGTB Khalsa College, University of Delhi.
She can be reached at [email protected]

INTRODUCTION corporate sector. It has become increasingly popular

over the last few decades. Charity by companies is not
Corporate Social Responsibility (CSR) is not a new
something new in India. But CSR is not merely charity
concept but is definitely the latest buzzword in the

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 Rabinarayan Samantara and Shivangi Dhawan

or donations. CSR is that way of running the businesses Economic Dimension - This dimension relates to
by which corporate houses contribute towards social company’s responsibility towards the company i.e. to
good and adds to value. It can be defined as a sense of ensure a fair amount of returns to the investors, right
responsibility of the companies towards the wages to the employees, providing goods to customers
community and the environment in which they at fair prices, responding to business risks in an
operate. adequate manner, etc. economic dimension is the first
and the most important one. It serves as the
An umbrella term for a variety of theories and practices
foundation or basis for other dimensions.
all of which recognize the following: (a) that
companies have a responsibility for their impact on Legal Dimension - The legal dimension demands the
society and the natural environment, sometimes company to abide by all the laws and the rule of the
beyond legal compliance and the liability of game in order to be socially responsible. Laws are
individuals; (b) that companies have a responsibility statements and codes which tell us what to do and
for the behavior of others with whom they do business what not to do. In order to survive in the long run,
(e.g. within supply chains); and that (c) business needs every company needs to follow these codifications of
to manage its relationship with wider society, whether dos and don’ts.
for reasons of commercial viability, or to add value to
Ethical Dimension - The ethical dimension represents
society.” - Blowûeld and Fryna. Companies can fulfill
the expectations of the society from the corporate
this responsibility by taking various measures and
houses. Society expects the company to do more for
launching different programs that will benefit society
them and go beyond the law to serve them better. It is
as a whole. Socially responsible companies try to
what society expects from the companies over and
integrate their economic objectives with social and
above the economic and legal responsibilities.
environmental objectives. Taking up CSR initiatives
can give a competitive edge to the companies and help Philanthropic Dimension – It represents the voluntary
them in their brand building. Capital, technology, and urge of the companies to do good for the employees,
Labourers (people) are essential for running an community, or society at large. This is what society
enterprise but ethics are vital for keeping the entities desires. It is completely at the company’s discretion,
together. It is really important for the company to for instance, donating for a cause, supporting
make “sustainability” a mindset and it’s a way to do educational institutions, doing their bit for the
business. Companies must try to bring value to the environment, etc.
world, and create value for its clients, customers or Few researchers named three dimensions more namely,
other stakeholders. Stakeholder’s Dimension, Voluntariness Dimension,
Corporate Social Responsibility is a multi-layered and Environmental Dimension. The stakeholder’s
concept. It has four interrelated dimensions namely, dimension is about the company’s responsibility
economic dimension, legal dimension, ethical towards its stakeholders which includes its employees,
dimension, and philanthropic dimension. “Corporate shareholders, customers, clients, suppliers, government,
social responsibility encompasses the economic, legal, etc. Companies must understand their responsibility
ethical, and philanthropic expectations placed on towards them and must try to align their goals with
organizations by society at a given point in time.”- corporate goals. Voluntariness dimension is about the
Carroll. company’s voluntary urge to contribute towards

92 Vol. 11, No. 2, May-August, 2020

 Corporate Social Responsibility in India: Issues and Challenges

society as a whole and make this society a better place demands of consumers towards companies to be
to live. The environmental dimension focuses on the ecologically and socially responsible drive them to
company’s responsibility towards the ecosystem. They contribute their bit towards the society and
must try to integrate their profit goals with sustainability measures. Consumers help in promoting
environmental goals. Green measures must be taken CSR activities by making the fair decisions of buying
in order to protect our environment and contribute the product produced by that company that contributes
to sustainability. to CSR practice.
CSR initiatives can prove to be really beneficial not d) Value Shift: A value shift has taken place within
only for society but for the company as well. Many the corporate entities. They have started working on
stakeholders are linked to corporate houses and are ethics, as a result, they feel helping society is the right
benefitted from the CSR programs. Increasing thing to do. They now believe in integrating their
awareness towards many contemporary issues affecting objectives of wealth creation with environmental and
the society and environment have made companies social objectives. Values drive them to work for the
do their part for the society and contribute towards betterment of the communities and its people.
nation-building (Grant Thornton IBR, 2014). Some
e) Brand Building: Companies believe that doing
of the factors driving CSR in India are:
CSR enhances the company’s brand and increases its
a) Cost Management: Cost management is crucial reputation in the market. Company’s efforts towards
for companies to survive in this competitive the society are highly appreciated by their consumers
environment. Companies that work on low expenses and clients and this factor further drives companies to
are considered to be sustainable and responsible. For contribute their share for the social good. This helps
example, Gases like carbon dioxide and other them improve their image in the global market.
greenhouse gases amount to a huge cost to the country.
f ) Staff Recruitment/Retention Issues: Green
A corporate house devise way to manage the level of
recruitment is gaining a lot of importance nowadays.
such toxic gases and helps the environment in return.
It involves the cheapest way to hire employees. This
This driver is really important to measure the
practice saves a lot of paper and energy and therefore
company’s performance and its degree of social
contributes to environmental sustainability. A lot of
responsiveness.
big companies and even start-ups go for e-recruitment
b) Tax Relief: The advantages of conducting CSR like to hire employees. Companies contributing to CSR
Tax advantage are another important driver of CSR. have a low employee turnover ratio and reduced
Corporate houses practicing corporate social absenteeism. Employees trust the companies and have
responsibility get tax exemptions from the government a high level of confidence if their company is
for doing social work and maintaining the ecosystem conducting CSR. CSR initiatives increase employee
in proper condition. Developing countries like India engagement and participation thereby increasing their
benefit a lot from tax reliefs. Therefore, it is very morale and productivity (PWC-CII, 2013).
important for companies to keep transparency in their
g) Government Pressure: Awareness about CSR is
CSR efforts in order to claim tax benefits.
increasing. The government takes various initiatives
c) Customer Demand: Customers purchase goods for the society’s and environment’s benefit and includes
of those companies which are CSR active. The corporate entities to be a part of it. Today, people and

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 Rabinarayan Samantara and Shivangi Dhawan

corporations are aware of industrial carbon footprint. companies can really contribute towards ecological
In order to reduce the level of carbon footprints, sustainability and can save the mother earth.
companies and entrepreneurs are devising new ways
k) Social Media: Social Media is an important factor
to conduct business operations in a more ecological
driving CSR. People have become sensitive to various
and socially responsible manner. This helps the
issues. There are n number of bloggers from a huge
government to reach out to those areas which were
and continuously growing community of internet
earlier not possible with the help and resources of
users engaged in a discussion about contemporary
corporate houses. Corporate entities have become
issues. Therefore, social media and its users constantly
more sensitive to the issues relating to carbon
want corporate entities to be sensitive towards the
footprint, animal adoption, children’s education, aid
environment and society. They want companies to
victims, etc. Also, provisions by the government on
indulge in nation-building by being socially and
CSR also put pressure on companies and drive them
ethically responsible.
to contribute a particular amount of their profits
towards CSR.
OBJECTIVES OF THE STUDY
h) Public Pressure: CSR is driven by the public
In light of the above-mentioned observations, the
pressure in the form of continuous reminders and
objectives of the present paper are:
pressing by various organizations, for instance, pressure
groups, consumers, media, other public and state i. To review the literature on various aspects of CSR;
bodies. They want companies to be socially ii. To discuss the CSR provisions in India;
responsible and do their bit for the communities and
iii. To study the acceptance and implementation of
the environment. Environment, labor laws, and human
CSR by Indian companies;
rights are the key areas on which public pressure is
centered. iv. To analyze different issues and challenges
associated with CSR; and
i) Investor Pressure: Investor pressure and
v. To suggest certain measures for ensuring improved
maintaining investor relations is one of the key factors
CSR practices in India.
driving CSR. Developing countries like India believe
that maintaining good investor relations is crucial for It may be mentioned that this study is completely
success. Investors invest in those companies which are based upon the secondary data. A systematic review
socially responsible and have a good social image in of the literature was done in detail for drawing
the market. This exerts pressure on companies to be necessary inferences. The secondary sources of data used
sensitive towards various contemporary issues and included journals, newspaper articles, textbooks, e-
contribute towards CSR. books, reports of companies, search engines, company
websites, scholarly articles, research papers, and other
j) Ecological Sustainability: A small number of academic publications.
efforts by corporate houses can really be beneficial for
the environment. With sustainable use of resources,
REVIEW OF LITERATURE
energy-efficient technologies, recruitment of
innovative employees who can devise more Rahman (2011) explored different dimensions of
environmental-friendly practices, recycling & reusing CSR. Various CSR definitions were studied from the
of products, reducing carbon footprints, etc., 50s until the 21st century to identify CSR dimensions.

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 Corporate Social Responsibility in India: Issues and Challenges

In 1950s CSR was an obligation towards society and Jothi (2016) made an attempt to analyze various
in the 1960s it was considered to be a relationship factors that drive a few selected public and private firms
between corporate houses and society. CSR definitions towards CSR contribution. Data was collected from
included a few other aspects like stakeholders, ethics, 318 respondents. Nature of ownership, Hierarchy
voluntariness, philanthropic, environmental level, gender, age, qualification, experience, and CSR
stewardship and triple bottom line in the ’70s to ’90s. driving forces are some of the variables which were
21st century’s CSR dimensions have a much wider considered. Compliance with companies’ act 2013 was
scope; apart from the above aspects it also includes ranked number one factor driving firms to contribute
improving the quality of life of citizens, human and towards CSR followed by community pressures,
labor rights, environmental concerns, corruption issues, increasing awareness, commercial pressures, reputation,
issues of transparency and accountability. etc. Companies today can’t work in isolation; they
Majumdar et al. (2008) described CSR as an must have a good CSR policy and should align their
inescapable priority for corporate houses in today’s business goals with sustainable goals.
modern and globalized world. They examined existing Nicolae and Sabina (2010) discussed various
CSR models and tried to find out difficulties associated dimensions and challenges of corporate social
with them during actual application in developing responsibility. The focus was on the number of issues
countries. Various models based on the academic
relating to CSR and also on how changes in attitudes
approach, institutional approach were discussed. They
and reorientation of efforts are required for effective
suggested that a conceptual framework of corporate
and efficient CSR implementation. They discussed
social responsibility is needed importantly in order to
legal, ethical, economic and philanthropic dimensions
bridge the gap between developed and developing
of CSR. Increased inclination and transparency are
countries. All five domains namely economical, ethical,
needed in a few areas in order to make the CSR concept
legal, philanthropic and environmental are required
a hit. The areas are Code of conduct, Standards
to be addressed while practicing CSR.
management, financial reports, audit and reporting
Prieto-Carrón et al. (2016) aimed at incorporating new (information), Labelling & Socially responsible
insights into the CSR study. They talked about the investment. This behavior can definitely fulfill CSR’s
impacts of CSR initiatives, the relationship between objective of Sustainability or Sustainable
business and poverty, issues of power & participation development.
in CSR, and governance-related dimensions of CSR.
They are of the view that currently only one side view Saxena (2016) studied various issues and challenges
of CSR is being considered and studied, but various associated with CSR. History of CSR in India before
sensitive questions related to corporate social 1900 and after 1900 till present was reviewed by the
responsibility are ignored. There is a pressing need to author. Ethical models, statist models, liberal models,
deeply study the pros and cons of CSR initiatives in and stakeholder models were discussed in association
developing countries. They suggested that researchers with history related to each model. Currently, Indian
and people who practice CSR must indulge in companies work on the Stakeholder model for its
collaborative studies on CSR in order to develop better CSR. The stakeholder model came into existence
impact assessment methodologies. Attention must be during the 1900s and is still continuing. It works on a
given to all important issues which are unaddressed or triple bottom line i.e. people, planet and profit. Under
were overlooked. this model, companies try to address and communicate

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 Rabinarayan Samantara and Shivangi Dhawan

with all of its stakeholder’s examples, employees, communicate their CSR activities. Companies must
customers, government, suppliers, investors, etc. aim for positive media coverage and CSR rating in
Demands of customers, investors, government and order to have better CSR associations.
various labor markets are considered to be key drivers
Dubbink et al. (2014) discussed the pros and cons of
of CSR. Issues like transparency, narrow perspective,
transparency in association with CSR. They evaluated
lack of consensus, lack of infrastructure, visibility
transparency policy based on three key criteria i.e.
factors are considered to be the main challenges to
efficiency, freedom and virtue. Transparency enhances
CSR. Creating awareness among the general public is
allocation efficiency, dynamic efficiency, and
the need of an hour for effective implementation of
innovative efficiency but on the other hand,
CSR efforts by various corporate houses.
maintaining full transparency can be really a costly
Arevalo and Aravind (2011) surveyed a number of affair. When information quality is good and good
managers at the top level of a few selected companies information can be provided at a low cost, then only
that are engaged in CSR activities namely the UN transparency will be efficient.
Global Compact (GC), in order to represent various
industry factors. Certain research questions on the Sharma and Mani (2013) conducted a study based on
model of CSR followed by Indian firms and different secondary data (annual report of banks) on 30 banks
drivers and obstacles associated with Proper CSR including public, private and foreign banks. The
implementation were answered. They found that purpose of the study was to analyze different CSR
Indian firms follow the Stakeholder approach for its activities carried out by the banks. Some of the activities
CSR activities, Ethics and values are important drivers which they analyzed were rural branch expansion,
for CSR and lack of resources or sufficient funds is priority sector lending, environment protection,
the major obstacle in the effective implementation of community welfare, women welfare, farmer’s welfare,
CSR initiatives. Researchers believe that Indian firms financial literacy, education, etc. Now, the company’s
have the right framework for proper implementation performance is not only judged based on its financial
of CSR; it’s just that an inclusive strategy that involves parameters but also on CSR activities initiated by
a majority of the workforce is needed. them. They concluded that though Indian Banks are
currently continuing with CSR initiatives still there is
Du et al. (2010) analyzed various aspects of CSR a dire need of putting more emphasis on Corporate
communication namely, message content, Social Responsibility. Public sector banks contribute
communication channels, and stakeholder specific more towards CSR as compared to Private sector
factors. According to them, CSR communication is a banks. RBI needs to be more stringent while enforcing
delicate matter but very important for businesses. The
regulatory requirements on these banks.
main challenge is to overcome the skepticism of the
stakeholders and to generate CSR attributions. A Rajput et al. (2012) conducted a study on the largest
number of ways may be adopted by companies to 500 Indian companies to test the relationship between
disseminate information or communicate their CSR CSR and financial performance. Sales and profit
initiatives. Corporate sustainability reports, Press figures of companies were taken to know their financial
Releases, Website Reporting, Advertising Media- performance and CSR rating were considered for their
Billboards, TV commercials, Magazines, etc., Product CSR contribution. By analyzing and interpreting the
Packaging are a few ways companies use to data researchers found that CSR expenditure by

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 Corporate Social Responsibility in India: Issues and Challenges

corporate houses leads to improved financial relates to CSR. Every company including its holding
performance. Firms with larger sales and profit figures and subsidiary company with a net worth of Rs. 500
contribute more towards CSR. They found that a crores or more, turnover of Rs. 1000 crores or more
positive relationship exists between CSR rating and and net profit of Rs. 5 crores or more are required to
the financial performance of the company. comply with all the provisions of CSR. Every company
which is eligible for doing CSR is required to constitute
Dhawan (2019) tried to study the acceptance of Green
a CSR committee of the board. Board of directors of
HR practices by Indian companies and how these
the company must ensure that the particular company
practices help the environment. Today, a lot of
spends at least 2 percent of its average net profits made
companies have started practicing Green HRM i.e.
during the 3 immediately preceding financial years, in
incorporating green measures in every aspect of HR
every financial year as per its CSR policy. Earlier,
practice in the company. The researcher talked about
companies were required to comply or give reasons
Green recruitment, green selection, green training and
development, green performance appraisal, green for noncompliance and then get away with it. But, as
retention, etc. Companies try to integrate their per the new amendment (2019) of Section 135 of the
objectives of profit maximization with environmental Companies Act, 2013, getting away will not be that
objectives by incorporating green measures in each HR easy. Amendment of the section incorporates a
activity. Though it is in its nascent stage the future of provision, according to which if a company is unable
G-HRM is really bright in India. If it is applied with to spend the target amount kept for CSR activities
proper planning and strategy it will be really fruitful. then it is required to transfer the amount to a fund
Carbon and environment footprints can be reduced, which is prescribed under schedule VII, for example,
making an organization a green organization. Prime Minister’s National Relief Fund. Within 30 days
after the date of closure of the 3rd financial year, the
Prathima (2015) tried to portray the best CSR unspent amount of money has to be transferred to
Practices of the top 10 companies globally. The the particular fund. If any company contravenes with
researcher studied 115 companies of different the provisions of Section 135, it is required to pay a
industries including automobiles, banks, FMCG, fine which ranges from Rs. 50,000 to Rs. 25, 00,000.
power, steel and many others. Sustainability programs Also, as per the provisions officers shall be liable for
by corporate houses can enhance innovation; retain imprisonment of up to 3 years. The penal provision
employees, help in building positive relationships with of the act bounds all the corporate entities fulfilling
Government and NGOs, building industry reputation SR criteria to perform Corporate Social Responsibility
and Brand. Tata group, Infosys ITC, Indian Oil, (CSR) and define the penalties and imprisonment for
Reliance industries, etc. are few companies that the violation of the CSR norms.
religiously contribute towards CSR. Carrying out CSR
activities is no more an option. It is an obligation of The companies may do their bit towards the following
corporate houses to comply with the particular act. causes:
Therefore, there is an important need to look at CSR 1. Eradication of hunger, malnutrition or poverty
more strategically.
2. Promotion of healthcare and sanitation
CSR Provisions in India 3. Offering support for education and employment
Section 135 (Corporate Social Responsibility) Rules, that can enhance vocational skills
2014 and Schedule VII of the Companies Act, 2013 4. Encouraging gender equality

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 Rabinarayan Samantara and Shivangi Dhawan

5. Ensuring sustainability spending. Corporate entities can now spend on

6. Protecting heritage, art, culture incubators that are funded by central or state
governments, etc. and also can make contributions to
7. Working for the benefits of the country’s armed various institutions that are engaged in conducting
forces research in different fields namely, science, technology,
8. Fostering and training for sports activities engineering, and medicine. By taking this initiative
government has effectively facilitated the concept of
9. Contributing to the relief project.
corporate social responsibility to be turned into
Hot of the Press: CSR into CIR: Government now Corporate innovation responsibility i.e. CIR in
has expanded the scope of mandatory corporate Table 1.

Table 1: CSR initiatives and green measures by Indian companies

S.No Company Cases
1 Honeywell India Honeywell has its presence in fortune-100 software-industrial companies. Industry-specific solutions
(also includes aerospace and automotive industry), technology controls and performance materials are
provided by this company. The company is committed and dedicated to building a better world by
incorporating sustainable activities in its operations and contributing to CSR. Honeywell Hometown
Solutions India Foundation (HHSIF) is a non-profit organization that supplements the CSR schedule
of the Indian Government with its global CSR framework. Their CSR efforts are towards:
1. Science and math education,
2. Family safety and security,
3. Housing and shelter,
4. Sustainability,
5. And Humanitarian relief.
HHSIF is awarded the winner of the “CSR Foundation of the Year Award” at the Dalmia Bharat-
CSRBOX 6th CSR Impact Awards.Honeywell’s top CSR programs:
1. Safe Kids at Home
2. Honeywell Science Experience (Education Program)
3. Honeywell-Safe Water Network Initiative
4. Honeywell Safe Schools
5. Honeywell Centre for Advancing Girls in Science
(Source: India Education Diary.com)
2 TATA Group A leader in technology and Consultancy, Tata Consultancy Services (TCS) has contributed Rs. 434
crores towards various sustainable development programs thereby doing their bit for the society and
environment. Domains of CSR efforts include health, environment, education, and skill-building.
The Company has a CSR committee of directors comprising N Chandrasekaran, Chairman of the
Committee, O P Bhatt, Rajesh Gopinathan and Aarthi Subramanian. The meetings of the committee
are conducted regularly thereby creating a considerable social impact.
(Source: India CSR Network)
3 ITC Group The multi-business conglomerate has spent Rs. 291 crores towards CSR as per their 15th sustainability
report in the year 2017-18. Their area of work includes:
1. Health & Sanitation,
2. Drinking-Water,

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 Corporate Social Responsibility in India: Issues and Challenges

Table 1 contd...
S.No Company Cases
3. Eradication of Poverty,
4. Education,
5. Vocational Training,
6. Livestock Development,
7. Livelihood Generation,
8. Women Empowerment,
9. Environment Sustainability,
10. Soil & Moisture Conservation,
11. Social Forestry,
12. Protection of national heritage, art and culture
13. And Agriculture Development.The company follows a comprehensive CSR policy and has also
constituted a CSR committee.
(Source: India CSR Network)
4 Reliance Industries As per their annual report the company has spent Rs. 904 crores towards CSR initiatives and programs
in the financial year 2018-19. Their area of work includes:
1. Rural Transformation,
2. Health,
3. Education,
4. Sports for Development,
5. Disaster Response,
6. Arts, Culture and Heritage, and
7. Urban Renewal
Reliance industries are doing their share for the society and environment. They are trying to keep up
with the Development Goals (SDGs) stated in the UN’s 2030 Agenda for Sustainable Development
and national goals on sustainable development.
(Source: India CSR Network)
5 IBM It is the biggest multi-national exporter of software in India. The company lays great emphasis on
values and ethics in business operations and was awarded the Golden Peacock Award for CSR in the
year 2010.
IBM programs:
1. IBM Reinventing Education Program: it has helped up to 50 government schools both in rural
and urban under-developed areas till now. It helps schools in integrating ICT and pedagogy tools
thereby leading to effective and smart learning.
2. Smart Rural Aggregation Platform: ICT enabled program provides smart solutions to rural
entrepreneurs present in Lucknow.
(Source: India CSR Network)
6 Mahindra Group It is an Indian Multinational Conglomerate. Mahindra group with Tech Mahindra and its other
subsidiaries contributed Rs. 240 crores towards CSR activities in the financial year 2019. Domains
include health, education, and the environment. The company believes in driving positive change and
contributes towards the betterment of society. They are doing their bit for the society and environment
since 2005.

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 Rabinarayan Samantara and Shivangi Dhawan

Table 1 contd...
S.No Company Cases
Few programs:
1. Celebrate Differently- Rise against climate change.
2. Hariyali- Plant a tree.
3. Nanhi Kali- For girl child education.
4. Employee Social options or ESOPs- An initiative through which employees give back to society
by participating in different initiatives
(Source: Economic Times)
7 Maruti Suzuki It is the pioneer in Indian Automobile Sector. Maruti Suzuki has contributed a lot towards Corporate
Social Responsibility initiatives. Areas of work include road safety, employee engagement programs,
skill development, and community development.(Source: India CSR Network)
8 Coca Cola India Coca Cola India Private Limited (CCIPL) has established a wholly owned subsidiary known as Coca
Cola India Foundation which is a not for profit company. The foundation has been carrying out
various projects in different states in India and few of them are:
1. Initiatives towards waste resource and waste management- “Doh Bin” is one of them.
2. Solar energy projects.
3. VEER Campaign in collaboration with CNN-IBN, Being Human Foundation and American
India Foundation (AIF).
4. Parivartan: A training program for retailers.
5. Support My School (SMS) Campaign: To promote education.
6. Lake rejuvenation projects.This foundation works on a systematic plan in order to fulfil its objectives
of water conservation, energy conservation, promotion of healthy and active lifestyle and social
welfare.
(Source: cocacolaindia.com)
9 SAIL The company carries the prestigious title of “Maharatna” and is the largest steel maker of India. SAIL
tries to integrate its business objectives with social and environmental objectives. It is committed and
dedicated towards holding high ethical standards within the company. The company has contributed
a lot in these areas namely health, education, water conservation, Villages development, solar energy
(alternate sources of energy) projects, calamity aid, vocational training in agriculture, sports, preservation
of art and culture. The company has won various awards and recognitions for being a responsible
corporate citizen and contributing to nation building.
(Source: India CSR Network)
10 Infosys Infosys limited is a conglomerate of digital and consulting services. It has spent Rs. 340 crores towards
CSR activities in the year 2018-19 as per its annual report. The company was an early adopter of CSR
policy and initiatives. They formed the Infosys Foundation which is a not for profit company. Aim of
the foundation is to develop the community and fulfil its CSR commitments.
Focus areas include:
1. Health (including hunger, poverty and malnutrition)
2. Education
3. Rural development
4. Gender Equality initiatives and empowering women
5. Environment sustainability
6. Preservation of art, culture and national heritage.They have constituted a CSR committee in order
to implement CSR programs.
(Source: India CSR Network and infosys.com)

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 Corporate Social Responsibility in India: Issues and Challenges

Issues and Challenges Harmonizing the Company’s Development Goals

with the Interests of its Shareholders: It is really
Running a business and keeping in mind the social
important to reconcile social responsibility and
responsibility is really a challenging task. The
companies today have to consider more than just economic performance and is, therefore, a big challenge
profits if they want to keep their stakeholders happy. too. The creation of shared and sustainable value
They are still trying to master the art of maintaining a thereby integrating the company’s development goals
balance between the company’s strategic objectives and with the interests of its stakeholders is a big challenge
Social/Environmental concerns. Some of the challenges in the road of CSR.
that the company face during CSR implementation Greenwashing: Inequality in India is really high. The
are: CSR law does not go far enough in reducing inequality
Failure to Consider CSR’s Holistic View: and doesn’t have a coercive enforcement mechanism.
Companies still have a narrow perception of CSR. CSR is not that transparent enough and therefore gives
They fail to understand the holistic view of CSR, that an illusion of progress. This leads to Green Washing
CSR has its impact on mostly all of the stakeholders on a national scale. This is one of the biggest challenges
of the company and it impacts both society and the for CSR compliance and effectiveness.
environment as a whole. It is very important for
Lack of Sufficient Financial Resources, Local
businesses to realize new opportunities and use them
Capacities, and Infrastructure: CSR may involve a
in solving public problems. They must try to create
hefty amount of investments. Therefore, companies
shared-value i.e. they must integrate business
must properly plan and prioritize their investments.
objectives with sustainability and social objectives. The
business should embrace CSR in their business Proper planning of resources to be involved and issues
operations and should clearly identify the areas of to be tackled must be done before executing initiatives.
priority and investment. Also, there is a lack of local capacities and proper
infrastructure. There are no good governmental and
Lack of Transparency: For the success and proper non-governmental organizations which can contribute
implementation of CSR policy within a company, towards CSR therefore; there is a dire need to build
Transparency is an important condition. CSR and local capacities and infrastructural facilities for effective
Transparency are closely linked. This helps various implementation of CSR.
stakeholders involved with a company to get a proper
insight into different issues that are relevant to them. Lack of Consensus: There is a lack of consensus
Practicing window-dressing within the organization among different local agencies and corporate entities
can hide a lot of information from the stakeholders. which results in duplication of efforts by the firms in
If society today, needs CSR then they also need CSR terms of CSR initiatives. This leads to unnecessary
transparency. The present level of transparency by competitive spirit among the firms which go against
corporate houses is completely insufficient. Companies the main objective of building value for the society.
do not make adequate efforts to disclose relevant
Lack of Participation by Communities:
information. This comes in between the trust-building
among corporate houses and communities. Communities for which CSR is to be done to show
Transparency is crucial for the success of any CSR less interest in the programs and initiatives scheduled
initiative therefore; lack of transparency is the biggest by organizations. Also, not proper efforts are
challenge faced by CSR. undertaken to spread the activities of CSR among the

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 Rabinarayan Samantara and Shivangi Dhawan

communities and thereby not instilling needed consider the development agenda in a much
confidence in the people. The inadequate broader way to avoid duplication of efforts.
communication between the organizations and  The pooling of resources and building of synergies
communities is one of the major challenges for CSR. by both companies and non-governmental
Lack of Strategic Planning: Due to a lack of strategic organizations for more efficient plus effective
planning, proper experimentation, innovation, and implementation of CSR activities.
engagement, companies aren’t able to make a  Efforts should be taken for poor and
meaningful impact on their CSR efforts. They are not underprivileged people of both Urban and Rural
able to identify ideal investment projects and therefore areas.
cannot provide high impact results. Corporate houses  The government should give awards and accolades
must understand the challenges faced by its citizens to corporate houses that are doing their bit for the
and then invest properly. needy and poor.
Faulty Execution and Implementation: Companies  Sensitization of students by making CSR a
fail massively when it comes to the execution and compulsory subject or discipline in schools,
implementation of CSR strategy. Companies must go colleges or universities. This approach will motivate
in with a commitment of long term, they must try to young blood and help them to face future
engage the workforce, and leaders should personally challenges. And also, to provide more innovative
commit and plan effectively. Don’t just speak about solutions for the betterment of society and the
it, act upon it make it happen. For increased environment as a whole.
effectiveness and efficiency it is important to execute  Sustainability Reporting: Sustainability reporting
CSR efforts strategically. is gaining importance these days because of the
growing recognition of issues relating to
CONCLUSIONS AND SUGGESTIONS sustainability. Framework for sustainable reporting
is provided by an organization known as the
Dealing with Challenges: Global Reporting Initiative (GRI). Guidelines on
 Creating awareness about Corporate Social sustainability reporting provided by GRI are widely
Responsibility amongst the general public. used by the corporate houses. A sustainability
report is a proper presentation of the sustainability
 Building a long-term goal and sustainable
performance of the company. It includes both
perspective on CSR activities in order to bridge positive and negative contributions by an
the gap between all the important stakeholders in organization towards sustainability. It discloses all
order to effectively implement CSR activities. the material information relating to the
 Companies must think of some diverse issues to organization’s goals, strategies, commitments, and
be tackled by their CSR practices. They should approaches followed.

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How to cite this article: Samantara, R. and Dhawan, S. (2020) ‘Corporate Social Responsibility in India: Issues and Challenges’,
IIMS Journal of Management Science, Vol. 11, No. 2, pp. 91-103.

IIMS Journal of Management Science 103

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