Introduction
Corporate Social Responsibility (CSR) in India has evolved significantly over the years. From being considered an act of charity and philanthropy, CSR has transformed into a structured and strategic part of business operations. The development of CSR in India can be understood through distinct phases, reflecting the country’s economic, political, and social changes over time.
Explanation: Each phase of CSR development in India shows how the role of businesses in society has shifted—from voluntary social work to legal obligations and strategic partnerships for social impact.
Phases of CSR Development in India
1. Pre-Independence Era (Before 1947)
CSR was rooted in religious and ethical values. Businessmen like Jamsetji Tata, GD Birla, and others practiced philanthropy inspired by values from Hinduism, Islam, Jainism, and Sikhism.
Explanation: Contributions were made to build schools, colleges, temples, hospitals, and rest houses. The focus was on community welfare, not profit-driven CSR.
2. Post-Independence Era (1947–1990)
During this period, CSR was influenced by India’s socialist model of development. Businesses were expected to support the government’s goals of poverty alleviation and industrial development.
Explanation: Business houses set up schools and hospitals, but there was no formal CSR policy. Companies focused on nation-building efforts through donations and welfare programs.
3. Liberalization Era (1991–2013)
With the liberalization of the Indian economy in 1991, competition increased, and companies began integrating CSR into their corporate strategies.
Explanation: CSR shifted from philanthropy to stakeholder engagement. Companies like Infosys, Tata, and ITC adopted CSR as part of their brand and business growth strategies. Sustainability and ethical practices gained importance.
4. Post-2013: Legal Mandate Era
The most significant phase began with the Companies Act, 2013, which made CSR spending mandatory for certain companies. Section 135 of the Act requires companies meeting specific thresholds to spend 2% of average net profits on CSR.
Explanation: CSR became a legal obligation, and companies started structured CSR planning, implementation, and reporting. Transparency and accountability became central to CSR practices.
5. Contemporary Phase (2014 onwards)
CSR is now seen as a tool for sustainable development and social impact. It has become more strategic, with partnerships between companies, NGOs, and government agencies.
Explanation: Focus areas include education, health, environment, gender equality, skill development, and rural development. CSR reporting has improved, and companies are adopting monitoring and evaluation frameworks.
Key Milestones
- 1991: Economic liberalization opened India to global markets, increasing corporate responsibility awareness.
- 2009: Voluntary CSR guidelines issued by the Ministry of Corporate Affairs (MCA).
- 2013: Companies Act passed, making CSR mandatory.
- 2014–present: CSR reporting and impact measurement became key focus areas.
Conclusion
The development of CSR in India reflects a journey from charity and welfare to structured, strategic, and legally mandated actions. As CSR continues to evolve, it is becoming a powerful force for inclusive growth, environmental sustainability, and responsible business conduct. With growing public awareness and government support, CSR in India is poised to become more impactful and accountable in the years to come.