INTRODUCTION
The concept of corporate social responsibility isn’t new, it dates back to the late nineteenth century, when the industrialists such as Andrew Carnegie and John D Feller began to donated significant amount of their profits in charity. It was Howen Dower who coined the term corporate social responsibility.
Corporate social responsibility(CSR) can be comprehended as the idea of pursuing profits while positively impacting the people and the planet. The mindset behind the application of csr is that companies possess a wider responsibility towards the ecosystem and the same shall be visible.
CSR is aims to create a company’s goodwill and brand equity among customers and the general public. The Hallmark of business is to not only concentrate on the bottom line like profit but should focus on three bottom people, the planet, and profit. Legal and government regulations as enshrined in Section 135 of “The Companies Act, 2013”, under rules of 2014, Schedule VII) mandates that companies with net worth, turnover, or profit above a certain threshold must contribute 2% of their net earnings over the previous three years to social development, report on their annual report, or provide an explanation.
LEGAL AND REGULATORY PROVISIONS
India became the first country to implement CSR in April 2014 spending through a legislation . This marked a pioneering stance in the globe arena, depicting that India with its visionary leadership has the ability to maximise profits with sustainability.
SECTION 135, COMPANIES ACT, 2013 : This section provides the mandate for constituting a corporate social responsibility committee and mentions its responsibility and functions. The members of committee shall act in accordance with the provisions of the CSR policy.
As per sub section 1 states that every company having a net worth equal to or more than 500 crore , or a turnover of rupees 1000 crore or more or net profit equal to more than five crore during any financial year or more during any financial year, is required to csr committee consisting of three directors out of them atleast one should an independent director.
FUNCTIONS OF THE COMMITTEE
Section 135 prescribes certain functions for the board committee to perform. They are mentioned as follows:
- formulate and recommend the csr policy to the board and undertake the activities the as mentioned under the schedule VII of the act.
- recommend the expenditure which required to under the activities sought above
- monitor and regulate the CSR activities.
The government allows the company’s to intervene in a number of areas such as environment, food, poverty, sanitation, health and many more which a social impact. The following are the details of activities proposed for intervention mentioned as per Schedule VII of the Companies Act, 2013:
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- Eradicating hunger, poverty, and malnutrition,[“promoting health care including preventive health care”] and sanitation [including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation] and making available safe drinking water.
- promoting education, including special education and employment enhancing vocation skills, especially among children, women, elderly, and the differently abled and livelihood enhancement projects.
- promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, daycare centres, and other facilities for senior citizens, and measures for reducing inequalities faced by socially and economically backward groups.
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Ensuring environmental protection, ecological harmony, flora and fauna health, animalwell being, agro-forestry, natural resource conservation, and soil, air, and water quality, as well ascontributions to the “Central Government’s Clean Ganga Fund for river Ganga rejuvenation.”
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Encouragement to veterans, war widows, including their dependents, including thepreservation of historical structures and places, along with works of art; the construction of public libraries; and also the promotion and advancement of traditional arts & handicrafts
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Promotional training for ruralgames , nationally known games, and the Olympic games.
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“Contributions to the Prime Minister’s National Relief Grant or any other CentralGovernment grant formed for the socioeconomic growth, relief, and well-being of Schedule Castes, Schedule Tribes, other backward groups, minorities, and women.
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Contributions to enterprises supported by the Central administration, State administration, or any Central administration agency or Public Sector Undertaking.
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Rural development and slum enhancement programs
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Disaster recovery, which includes relief, reconstruction, and regeneration.
SIGNIFICANCE OF CSR
Corporate social responsibility has emerged to be one of the most required and requisite social s hemes which mandates corporations who have reached a certain threshold to contribute to the people and planet. It’s a long term and structural commitment for the better of the society and not just profit maximisation.
As CSR is becoming an increasingly important aspect of any business, it serves as a way for engagement between the stakeholders. In the contemporary world, where there are plethora of contemporary problems, which can solved by collective efforts and through decent administrative measures of the companies. This would help in creating a lasting social impact along with the better of the world.
Companies such as TATA, DABUR INDIA, ITC, MAHINDRA AND MAHINDRA have contributed immensely to areas such as women empowerment, sustainability, education , health , employment , sports, agriculture and other such requisite sectors of the economy.
CONCLUSION
India has its own set of problems namely large population, hunger, poverty and malnutrition and many more. Building community programmes and workshops for health, education by the enterprises would have overcome these problems to a certain extend. As India accounts for the largest population in the world, a more concentrated effort is required from the private, public and civil society to leverage the gap between the India and the globe.
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