ISSN (O) : 2584-1378


AUTHOR’S NAME : Nafia Iqbal
UNIVERSITY - Tamil Nadu Dr. Ambedkar Law University


In the wake of globalization and increasing corporate influence, the concept of Corporate Social Responsibility (CSR) has gained immense significance globally. In India, the idea of CSR has evolved from being a voluntary practice to a statutory requirement under the Companies Act, 2013. This legislation has set the stage for corporations to align their business interests with social and environmental concerns, fostering sustainable development while fulfilling their legal obligations.


Corporate Social Responsibility (CSR) refers to the ethical framework and commitment of businesses to contribute positively to society while ensuring sustainable growth. It transcends profit-making objectives and encompasses a wide array of initiatives aimed at promoting social welfare, environmental sustainability, and community development.


The Companies Act, 2013 mandates certain classes of profitable companies to spend a portion of their profits on CSR activities. Section 135 of the Act outlines the provisions related to CSR, applicable to companies meeting specific financial thresholds. According to the legislation:

Applicability: Companies meeting any of the following criteria are required to constitute a CSR Committee and spend a prescribed amount on CSR activities:

  • Net worth of INR 500 crores or more.
  • Turnover of INR 1,000 crores or more.
  • Net profit of INR 5 crores or more during any financial year.

Constitution of CSR Committee: Eligible companies must constitute a CSR Committee consisting of three or more directors, including at least one independent director. The committee is tasked with formulating and overseeing the company’s CSR policy and activities.

CSR Expenditure: Companies falling under the purview of the CSR provisions are required to spend at least 2% of their average net profits made during the three immediately preceding financial years on CSR activities.

Mandatory Disclosures: Companies are required to disclose their CSR initiatives, policies, and expenditures in their annual reports, outlining the projects undertaken, the amount spent, and the impact generated.


Under the Companies Act, 2013, CSR activities encompass a broad spectrum of initiatives aimed at addressing various social, economic, and environmental challenges. Some common areas of CSR initiatives include:

Education And Skill Development: Supporting education by building schools, providing scholarships, and promoting skill development programs to enhance employability.

Healthcare and Sanitation: Undertaking initiatives to improve healthcare facilities, providing access to clean water, and promoting sanitation and hygiene practices in rural and underserved areas.

Environmental Sustainability: Promoting environmental conservation through tree plantation drives, waste management initiatives, and adoption of sustainable practices to reduce carbon footprint.

Livelihood Enhancement: Supporting livelihood programs for marginalized communities, promoting entrepreneurship, and empowering women through vocational training and income-generating activities.

Community Development: Investing in infrastructure development, promoting sports and cultural activities, and supporting disaster relief and rehabilitation efforts.


While CSR presents significant opportunities for businesses to create a positive impact on society, several challenges persist in its implementation:

Resource Allocation: Balancing financial resources for CSR activities alongside core business objectives can be challenging, particularly for smaller companies.

Impact Assessment: Measuring the tangible impact of CSR initiatives and ensuring transparency and accountability in reporting remains a significant challenge for many companies.

Effective Implementation: Identifying relevant CSR projects aligned with the company’s core values and objectives and ensuring effective execution requires careful planning and stakeholder engagement.

Changing Regulatory Landscape: Adapting to evolving regulatory requirements and staying abreast of emerging trends in CSR practices necessitates continuous monitoring and proactive engagement.


Corporate Social Responsibility (CSR) represents a paradigm shift in the way businesses perceive their role in society. In India, the statutory provisions laid down in the Companies Act, 2013 have institutionalized CSR, making it an integral part of corporate governance and accountability. By embracing CSR initiatives, companies not only contribute to social welfare and sustainable development but also enhance their brand reputation, stakeholder trust, and long-term viability in an increasingly competitive marketplace. As businesses continue to navigate the complexities of CSR, fostering collaboration, innovation, and shared value creation will be key to unlocking the full potential of corporate citizenship in driving positive change for the greater good.Through a commitment to Corporate Social Responsibility, businesses have the opportunity to become agents of change, fostering inclusive growth and sustainable development for present and future generations.

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