New CSR Mandate 2013: Procreation or Alienation? An Empirical Analysis

Abstract

India's new corporate social responsibility (CSR) law requirement has made it the first country in the world to mandate at least 2% of their average net profits from the preceding 3 years in CSR. Is CSR initiative in India appropriate and revolutionary? Or this should still be considered as a corporate philanthropy? This is a hot question for discussion in any forum and at the level of policy making bodies, where, most business leaders recognize CSR expenditures as not a donation, but an investment for the long-term interest of its shareholders and society in general. So, will it be right for the government to be over-prescriptive fixative for this? If CSR mandates are directed and implemented in the right direction, one could see the world to a superior level of corporate governance and social responsibility or vice-versa. Therefore, this paper is an attempt to understand the extent to which the new mandate on CSR under Companies Act of 2013 as a socially responsible initiative is competent enough to bring forth changes in our social and environmental aspects to address the gaps and find out remedial actions to see that deprivation is less and poor people are capable of sustenance. The study provides a generalperspective about the new CSR mandate 2013 in India through a survey of approximately 50 companies of varied sectors such as pharmaceuticals, biotech firms, NGO-s or Non Governmental Organizations, Information Technology, telecom and others. Correlation analyses have been used to study the inter-relationship between the new CSR mandate and the socio-economic, legal and financial as well as the environmental dimensions if implemented well.