Are Mandatory Corporate Social Responsibility (CSR) Interventions in India Demand-Driven? The Case of Karnataka

Abstract

Corporate Social Responsibility (CSR) scenario in India witnessed a paradigm shift with the announcement of the Companies Act, 2013 which made CSR mandatory. Post the Act, there is an increase in the availability of CSR funds. Majority of the companies adopted the model of partnering with local NGOs to plan and implement programs. The Act envisages a positive role for CSR funds to promote social development in the country by complementing public expenditure. In this new role, CSR funds are expected to be invested where there is greater demand for social interventions. In this background, the study makes an attempt to test the hypothesis that CSR interventions are supply-forced rather than demand-driven in the case of Karnataka. The study observed greater CSR investments in developed districts and districts which are ranking low on the Human Development Index received a lower share. The analysis shows that CSR interventions are supply-forced rather than demand-driven.