CSR in Transition: from Voluntary to Mandatory – the Indian Case

Abstract

The research presented here summarizes the first stage of a large bilateral (Israeli and Indian) academic effort. This scholarly endeavor involves an attempt to explore the impact of the Indian Mandatory CSR (MCSR) law from both practical and theoretical perspectives. We look at this unique legislation as a “pilot” scheme that challenges traditional terminologies such as Corporate Social Responsibility (CSR), with its basic precondition of voluntarism (“beyond compliance”), Corporate Philanthropy, and the role of taxation between the two. Our focus in this study is on the concept of CSR and on a thematic discussion of the literature review’s findings. The two other themes are left for future investigation. The systematic review includes quantitative and qualitative analysis of 47 academic papers regarding MCSR in India. The results provide significant background information for intended further research on the subject matter. For example, 72% of the studies were conducted by Indian scholars, suggesting that the MCSR is not an attractive research topic, possibly because Western researchers do not view it as relevant. Another finding is that most of the studies reviewed (63%) were qualitative, perhaps indicating that they are focused more on managerial interviews, other reviews, and legal articles, and less on financial performance or other statistical measures. Qualitatively, the leading themes were that MCSR is debated as a form of taxation, the 2% spending cap that became a ceiling, the limits of the “comply or explain” approach, corporate fraud, MCSR’s relevance to SMEs, the director’s duties to the stakeholders and last, geographical inequality.