What is Corporate Social Responsibility?
Corporate Social Responsibility is an act of self-regulation, wherein large corporations come forward with ways to be responsible towards society. The efforts taken by such corporations to better the community and the world is the essence of what corporate social responsibility is about. One of the primary motivational facets as to why these corporates engage in CSR activities is social accountability. The goal is to positively contribute towards various philanthropic causes which improve the society and build a positive reputation for the company. Corporate accountability, corporate responsibility, corporate volunteerism, environmental leadership, ethical labor and work practices, and economic responsibility are some examples of CSR activities practiced by corporations.
Corporate Social Responsibility in India.
While in most countries CSR remains a voluntary philanthropic activity, India has become the first country to make it mandatory. As a result of an amendment made to the Companies Act in 2013, CSR was legally mandated in India.
Section 135 of the Companies Act, 2013, provides that companies having,
Schedule VII suggests various areas wherein companies may implement their CSR activities.
Corporate Social Responsibility during Covid- 19.
The novel coronavirus outbreak has wreaked havoc in the world. With the unprecedented situation, where in the world has come to a standstill, with a lack of knowledge and resources to deal with this pandemic; CSR has become more important than ever.
After the outbreak was notified as a ‘disaster’ by the Indian government, the Ministry of Corporate Affairs noted through General Circular No. 10/2020 dated 23.03.2020, that companies spending funds for Covid-19 relief would be permissible as a CSR activity. Many corporates have been quick to take this opportunity. There has been an overwhelming response from corporates in India, in the form of funds spent on Covid-19 relief work. Large donations to various government funds, creating awareness about social distancing and the importance of sanitization, providing health kits, and donating to vaccine trials are some ways in which these Indian corporations have fulfilled their CSR obligations during this pandemic. There is no limitation on the amount that can be spent on CSR activities for Covid-19. Apart from the PM Cares Fund and the State Disaster Management Authority, contributions can also be made towards preventive healthcare, providing quarantine facilities, and such other activities can be considered as CSR activities. Contributions made to the Chief Minister’s Fund, State Relief Funds, payment of salary to employees and workers during lockdown period, and payment of wages to causal, daily wage and contractual laborers during lockdown period are not admissible as CSR expenditure. While the companies have the liberty to decide the manner and proportion in which they contribute, it is necessary that such spending should be for activities mentioned under item no (I) and (XII) of Schedule VII of the Companies Act.
The overwhelming impact of these CSR activities towards Covid-19 relief has shown the importance of the proper distribution of developmental funds in areas such as healthcare, poverty alleviation, and education. There needs to be maximum transparency that informs us that the funds are being spent as effectively as possible. Reduction of poverty and sustainable development action during these perplexing times cannot be attained through government action alone. It is essential that corporations come forward and contribute to societal welfare.
