Corporate Social Responsibility in India

Chapter 1: Understanding Corporate Social Responsibility

Introduction

The much anticipated visit of Bill Gates to New Delhi in 2011 was not designed to inspire future technological innovation. Rather, it was aimed to build on the philanthropic sentiment expressed in his 2008 speech and directly engage with some India’s richest corporate entrepreneurs[1]. He challenged the leading businessmen in the world through his speech, claiming that:

“The world is getting better, but it’s not getting better fast enough, and it’s not getting better for everyone. The great advances in the world have often aggravated the inequalities in the world. The least needy see the most improvement and the neediest get the least, in particular the billion people who live on less than a dollar a day”[2].

Any developing nation typically faces several major challenges and India is no exception to it. As the economy continuous to grow the problems of providing adequate health services, educational opportunities, gender disparity and income gap are becoming obvious[3].  Through his speech, he urged all the businessmen to make availability of their capacities and innovations for the developing nations to cure their problems, like lack of infrastructure, prevention of HIV, malaria etc.[4] According to gates, these problems can be rectified with the contribution of businesses to the society because no matter how large and how widespread the network of one philanthropist or government, it cannot cover the localized problems that developing areas constantly struggle with. The businesses that service and are supported in such areas can go a long way in driving growth in these communities and ensure inclusive development. To achieve this development, the corporations must be compassionate and sensitive to the poor in the society, the collaboration of governments with companies can yield better economic and regulatory performance not only to wealthy but to other classes in the society as well[5].

During the time of his speech, the proposed 2009 bill on amendment to Companies Act 1956 was still pending in early 2011, the Ministry of Corporate Affairs inserted a section on mandatory Corporate Social Responsibility[6] (CSR) spending for those corporations operating in India[7]. Those companies exceeding certain amount of capital as mentioned in the Act, (which is discussed in detail in the later chapters of this paper), must spend two percent of every year’s profits, averaged over the past three years towards socially responsible activities[8]. The new company bill didn’t make an attempt to define CSR, instead, provided freedom for the companies to frame their own policies on CSR spending, but with the condition that they were to report their expenditure on yearly basis to ensure compliance[9]. This law on mandatory CSR once implemented, was welcomed by some and objected by others and several companies viewed this law as an additional tax.

India is the first country in the world to turn corporate giving into a law[10]. The people of India are going impatient on the extent of contribution offered by multi nationals towards the betterment of society, which is likely to pose pressure on India’s wealthy because apart from the wealth provided to the country through corporations this country is a home to 55 billionaires, influencing the rise of global trade and influx of foreign capital. Unlike Tata Group, IBM, Infosys, who are the trendsetters in philanthropic contribution for the social welfare in India, many companies both national and international have refused to contribute at least a nominal amount of their returns for the welfare of the country when the Act was voluntary.

Gates, unlike other scholars did not initiate any doubt on government’s policy on philanthropic spending he believed that, companies and governments have the ability of eradicating poverty while working together[11].  After Gates visit, many Indian corporations took it as an opportunity to criticize mandatory spending by quoting, as long as persons like Gates are in this market, there is no need for CSR to be backed by any legislative sanctions and this regulation would ultimately result in raising taxes, which a popular political tactic to improve country’s revenue.  Some evidence show that nearly 70 % of funds collected by the government were enjoyed by associated bureaucracy rather than helping the needy[12]. According to other scholar, mandatory spending introduced in India could serve as an answer to problems that society is facing due to corporate malpractices[13]. However a good comparison and efficient learning on CSR is possible through Indian Corporate law, which is based on Anglo-American roots[14]. This paper deals with the analysis of the effectiveness of India’s move towards mandatory CSR and its impact on society. It is divided into four chapters, the first chapter dealing with the definition and scope of CSR given by many scholars and international agencies, the author would also add in the global perspective of CSR. This chapter also deals with the Indian perspective of CSR. Moving onto the 2^nd chapter, it mainly deals with the transition from voluntary to mandatory regime and the reasons behind it taking popular cases into consideration. The 3^rd chapter deals with the overall view of Indian companies Act 2013 and its comparison to earlier versions. This chapter will focus on the effects and drawbacks of the present Act.  The final chapter is about the CSR performance by MNCs in India, the extent to which the companies abide by the 2013 Act and CSR contribution to environment and Societal welfare. The latter part is about conclusions and recommendations.

Corporate Social Responsibility

The concept of corporate philanthropy and business ethics can be traced back to academics and businessmen in 19^th century who promoted the belief that “private business is a public trust”[15]. In the beginning CSR was considered as an additional financial input by businesses, however at present it is accepted that CSR is not merely charitable activity but a responsibility of a company to promote it as an integral part of the business exercise[16].

The modern concept of CSR as we know today is largely a product of industrialisation and globalisation which saw emergence and growth of big multinationals equally powerful and influential to institutions like Church or state, government. The genesis of modern day CSR has transformed from social contract to social change which intersperses the issues of social, moral and political obligations of individuals and organisations, particularly that of the business, towards society through various phases of human development[17]. Some argue that CSR is what French philosopher Rousseau understood by unwritten social contract between society and business[18]. “Social contract signifies co-existence and co-living of both in a mutually advantageous, or symbiotic, relationship”[19]. This unwritten social contract implies that the business conduct their operations within society and draws all its resources from society, in return society expects business to show responsibility for its operations[20].  According to this social contract society authorises business to use land, natural resources for their operations as their agents. It is argued that through social contract business is socially, morally and politically bound or obliged to improve the quality of society and it is incumbent upon them that they share their profits or pay back to the society through activities called CSR.

Evolution of the Concept of CSR:

The genesis of CSR, by most accounts, lies in the unbridled greed and ruthless, unethical and exploitative practices of big businesses in the post-Civil war America which Mark Twain immortalised s the ‘Gilded Age’[21]. The big businesses started to emerge in 1870s gaining monopoly in areas of petroleum, railroads and others, their activities increasingly affected other realms of society and public debates began on the appropriateness of some of their activities. There were widespread social and political protests against the monopolies as robber barons’ has increased since “the new industrial trusts and corporations which had become too powerful, wasted resources, were politically dangerous and socially irresponsible”[22]. In response to the protest the American government intervened to correct the social behaviour of big corporations in 1890s and passed laws on child labour, industrial safety, workers’ rights to form truss and against the monopoly practices. The US Supreme Court upheld the government’s intervention in what has essentially been free enterprises until then, and said in 1906 that the “corporation is a creature of the state, it receives certain privileges and franchises and hold them subject to proper government supervision”[23]. This bolstered the American government to follow up with more legislation on labour protection, public utilities and banking services during the subsequent decades to stop big businesses from doing whatever fancied them irrespective of the consequence for people or environment[24]. As a result American corporations became more aware of their public responsibilities and powerful businesses like Henry Ford and John D Rockfeller promoted social causes, in the areas of education and introduced a culture of private support for public causes that America witnesses today[25]. Corporate philanthropy concreted with government regulation characterised CSR in US.

The second industrial revolution in US had its own distortions, so did the first one in UK, but of a different nature and raised debates over social fallout of corporate activities. The pioneers of the industrial era advocated responsible approach for the less fortunate ones who had failed to prosper from the revolution and argued about enlightened self-interest as: “workers who are treated well would respond well”[26]. Europe had a tradition of social democratic practices unlike US which expected business to be more responsive to social needs and much greater regulatory role for the government to deliver social goals and in countries like France and Germany state played an important role in the process of industrialisation. As a result social causes like education and healthcare was supported by business to the workers[27].

In the beginning of 20^th century saw welfare capitalism in which companies provided community facilities to workers and their families. Though it was done with commitment, it was not purely altruism because facilities were mostly aimed to keep labour unions under the management. The timeframe from 1900 to 1920 is progressive era for the development of CSR, additional laws were passed in most developed countries for social betterment but industrialists responded to the growing criticism over the negative impact of industrialisation on community and family by developing industrial welfare programmes for education, socialisation of workers, producing good works and good citizens with a view to legitimatise business as community or public service[28].

After World War II, the emphasis on humanising business and promotion of labour protection, banking reforms and public utility controls led CSR to assume a more coherent shape. During 1950s academic attention was paid to issues of business and social responsibility[29]. In 1953 the New Jersey State Supreme Court gave a significant order to remove legal restrictions on corporate philanthropy[30]. A shareholder objecting standard oil company donation to Princeton University brought a lawsuit against the company[31]. Court ruled in favour of the company accepting the argument that its donations to university will help in educating future potential employees[32]. This motivated many firms not only in the U.S but around the world to pursue in corporate giving. As a result American firms extended their global reach significantly during past 2 decades by removing national boundaries in both production and sales[33]. In addition, the three major developments the progressive liberalization of cross border trade in goods and services, economic deregulation and rapid advancements in information and communication has brought changes in CSR during second half of 20^th century[34]. These developments raised a serious question about the nature of corporation and the scope of its social responsibilities creating pressure on the firms manly in the U.S and UK than in most industrial nations[35].

Bowen, who is the father of CSR, gave a first formal definition to CSR in 1953 as, “businesses were expected to produce social goods like higher standard of living, wider economic progress and security, order justice, freedom and development of individuals”[36]. After this many scholars defined CSR in a wider context, the 1960s and 1970s changed the narrative of social and corporate responsibility in many ways and the term CSR was commonly used. Johnson in 1971 expanded corporate responsibilities beyond shareholders to develop a stakeholder approach and proposed that instead of striving only larger returns to its shareholders, responsible enterprise should take into account the interests beyond them to include employees, dealers, local communities and the nation as a whole[37]. The stakeholder approach gained prominence in 1990s with the fall of neo-liberal policies to overcome the poverty caused to society.

The 21^st century saw greater focus on CSR, one of the contributing factors was major financial scandals and corporate meltdown of a number of US based corporations like Enron, Lehman Brothers, Arthur Anderson. Several new concepts have come to be associated with CSR in the 21^st century like inclusive or pro poor business targeting poorer groups and environmental concerns into investment activities in order to influence the business practices[38]. However the trend of CSR in global perspective gained its prominence with the launch of Global Compact by United Nations in 2000[39]. It is one of the largest voluntary corporate citizen initiatives pushing to adopt its principles in business activities in order to precipitate support for UN goals[40]. The movement in support of CSR initiative is found in European Union[41] from the macro level of UN Global compact. The new CSR policy published in 2011 by European Union calls for business enterprises operating in EU zone to “have in place a process to integrate social, environmental, ethical, human rights, and customer concerns into their business operations and core strategy in close collaboration with their stakeholders.”[42] In addition to this many international organisations like International Labour organisation, ISO 26000, OECD Guidelines for Multinational Enterprises etc, are actively promoting CSR regulatory measures and instruments.

Defining CSR

Though CSR has become part of business community over last 30 years[43], despite the existence of various theories and definitions there is ambiguity and lack of clarity over the working definition of CSR[44]. There have been number of attempts to exactly define CSR, the proliferation has increased confusion because it is often used interchangeably with various terms such as, corporate philanthropy, corporate citizenship, business sustainability and corporate governance[45]. The ISO Strategic Advisory Group on Social Responsibility also confirms that “there is no single authoritative definition of the term corporate organizational social responsibility”[46]. Due to lack of well-defined analytical framework the term is interpreted differently with varied meanings among different audiences[47].

According to Carroll, it was Bowen .H. who originated the concept of CSR in 1950 in his book “The Social Responsibilities of a Businessman”, he is referred as father of CSR[48]. Bowen argued that it is an obligation on the corporations to follow those policies and resolutions which are appropriate to the aims and principles of society[49]. According to him CSR emphasises that “businesses exist at the pleasure of society and that their behaviour and methods of operation must fall within the guidelines set by society and businesses act as moral agents within society”[50]. For some scholars, social responsibility is what a firm does to influence the society positively in which it exists but for others CSR is an obligation on the firms[51]. In 2001 European Commission stated that “CSR is a concept whereby companies integrate social and environmental concerns in their business operations and in their interaction with their stakeholders on a voluntary basis”[52]. Similarly in 2005 the International Chamber of Commerce highlighted the voluntary nature of initiatives by firms, where voluntary nature means at the minimum being legally complaint to extant local regulations and different from traditional legal requirements[53]. The social responsibility by firms is beyond legal compliance while not being imposed upon or obligated by formal regulations[54].

“A company that undertakes activities aimed at communities (be they philanthropic, social investment or commercial initiatives)   but does not comply with business basics cannot be termed socially responsible”[55]. The firm’s commitment to socially responsible behaviour must be in the form of understanding and positively influencing corporate actions on society as a whole that will take care of stakeholders’ interest and welfare without prejudicing the values and expectations of the organisation itself[56]. “Corporate social responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families, as well as of the local community and society at large”[57]. In addition to this CSR is a combination of business ethics, community investment, environment governance, human rights, the market place and the workplace[58]. It is stated that CSR is nothing but the fulfilment of a firm’s ‘internal and external self-actualisation needs’ which are placed on the top of their organisational needs pyramid[59].

Carroll introduces pyramid style diagram to explain about CSR, which is mostly used by many scholars and researchers[60]. According to him “corporate social responsibility involves the conduct of a business so that it is economically profitable, law abiding, ethical and socially supportive. To be socially responsible means that profitability and obedience to the law are foremost conditions when discussing the firm’s ethics and the extent to which it supports the society in which it exists with contributions of money, time and talent”[61]. It encapsulates the notion that business entities owe some duty to public at large[62]. Carroll’s pyramid model encapsulates the idea that business will not run in isolation. Business actions are mainly based on the beliefs of the society or its environment affecting the values of the stakeholders of the company, who are the dominant decision makers of the organisation. Thus the universal model of CSR is contrary to Carroll’s Pyramid because legal responsibility is viewed as a basic responsibility and in countries like India CSR expenditure has to be disclosed in its annual reports as a mandatory regulation. Carroll’s pyramid model contains four categories from most to least important. According to Carroll, “history of business suggest an early emphasis on the economic and then legal aspects and a later concern for the ethical and discretionary aspects”[63]. The four components are mutually exclusive helping the manager to identify various types of obligations which are in constant tension with the other[64].

[65]

The basis of the pyramid is the economic responsibility of the corporation to make profit, in order to achieve this, it must respect its legal responsibilities and the next two layers consist of ethical and philanthropic responsibilities, the distinction between them is desirability which is least important among the other three[66]. It is suggested that along with profit maximization corporations take some level of responsibility for the community in which they are part and strive to work for the development of that community, being socially responsible implies recognizing obligations and going beyond mere compliance with law[67]. The growth of corporations simply based on economic growth parameters is unsustainable and not contributory to corporate success.

Perspective of CSR in India

Before its evolution into a regulation in Indian subcontinent, it has been a tradition for more than hundreds of years for businesses in India to engage with the communities in which they operate and also found in the preaching of all major religions prominently practiced[68]. India is said to be a mixed economy comprising of state-owned public sector and private sector subject to industrial licensing with administrative controls on imports and exports, foreign exports etc[69]. Despite its rapid growth in global economy, India has not shed the problems of severe social handicaps like gender inequality, corruption, illiteracy and poverty[70]. Income opportunity for the poor, education and equal treatment to men and women can contribute to solve these development problems in India[71]. “The long-term stability and sustainability of India might be threatened if the social and environmental problems are not solved” and often Indian government was chastised for not tackling societal and environment related problems affecting to overall growth[72]. National Council of Applied Economics Research (NCAER) reported that 50% of the consumers in India are from rural areas and this is a prime market for consumer goods and essential services[73]. Indian literacy rate grew to 74.04% in 2011 from 12% at the end of British rule in 1947 as stated by UNESCO on the annual International Literary Day, considering the rate of increase, it would take another 20 years to clear this problem[74]. Thus the new CSR regulation is a vital program that can be implemented for rural, societal and environment development.

During pre-industrial period, (after 1850s) money was predominately used to serve the needs of the society, its principal role was to donate for the welfare of others.   This was the main motivation for the merchant class of that time period to contribute their earnings to charitable works, building schools, temples, hospitals, relief and rehabilitation during floods and famine[75]. In addition to this few Indian business communities more attentive towards philanthropic activities in their business model as a sense of social offering. Indian merchants didn’t have the entire market for themselves, they had to compete and collaborate with 17^th century’s East India Company and philanthropic activities in Indian Corporate can be traced back then[76]. In 1850’s the cotton trade brought enormous wealth to Bombay, a small part of it was utilised for honest trade for improving the city and the other part was donated by merchants to construct public facilities like hospitals, libraries and buildings for training and higher education[77]. The Birla family have significantly contributed to philanthropy, apart from constructing temples, they have contributed to major institutions of technology, medicine and education[78]. By the time British decided to leave, Birla’s assets were more than $100 million and they were the major donors to India’s freedom movement[79]. Later the indigenous industrialization was instigated through western industrialisation brought by the British.  It motivated the established merchant communities like Tata, Bajaj, Modi etc. who were strongly devoted to philanthropic towards CSR[80].  However, their contribution is not purely generous, they also had commercial interest in supporting for the country’s industrial and social development[81]. CSR practices during this period were self-regulated philanthropic activities were mostly sporadic and were not part of long-term business strategy[82].

The British rule in India lasted for more than 200 years and the country’s struggle for independence dominated the second phase of CSR (1914-1960). This phase was influenced by Gandhi’s theory of trusteeship and appealed for contributing to social regeneration and nation building also played an important role in influencing participation of business communities during and beyond this period[83]. Colonial government promoted social causes by giving tax concessions and encouraged the wealthy to donate or public causes in 1922, it also granted 50 percent tax exemption to individuals for charitable purposes. It is largely believed that CSR has its origin in Gandhi’s concept of trusteeship:

He felt that “capitalist should be treated as trustees of the assets vested with them, provided they conduct themselves in a socially responsible way[84]. The ownership of capital was one of trusteeship motivated by the belief that essentially society was providing capitalists with an opportunity to manage resources which need to be managed on behalf of society in general”[85].

This view on ownership and trusteeship were revolutionary and promoted various Indian companies to play active role in nation building and promoting socio-economic development during 20^th century by committing themselves to reforms like abolition of untouchability, the caste system, promoting SME’s (Small and Medium Enterprises) industries and development of rural areas[86].  Up to this period CSR practices were based on ethically influenced model, the origin of which ‘lie in the pioneering efforts 19^th century corporate philanthropists such as the Cadbury brothers in England and the Tata family in India[87]. However, CSR has begun to take shape in the forefront of public disclosure as India continued to shed the ties of colonialism and became an international economic force[88]. As the collective consciousness continued in the wake of independence from the Great Britain, India embraced ‘mixed economy’ model post-independence, which incorporates aspects of capitalism and socialism under which both the public and private sectors coexist successfully[89]. At the time of independence, majority of the population were below poverty line and this mixed economic model of governance was expected to be the solution directing towards social and economic growth, which led to the emergence of public sector undertaking and strict regulations on labour and environmental standards[90]. Indian government has inherited British Corporate Law and state control of business enterprises into its regulatory scheme[91]. The nebulous mix of business with social responsibility lived on through independence and government didn’t put as much emphasis on CSR as it does today and finally after a decade of independence India codified an Act to govern companies including their incorporation and dissolution and promote social welfare through corporate giving with the passage of Indian Companies Act 1956 for the first time[92].

CHAPTER: 2

THE TRANSITION FROM VOLUNTORY TO MANDATORY RULES

In the present era of global financial crisis, corporations are attributed with and blamed for widening income disparities, environmental calamities calling for greater corporate social responsibility and state control over corporations around the world. Despite of voluntary consideration of CSR efforts by majority countries and corporations, India has marked its departure from the rest making CSR as a mandatory fulfilment by the corporations. This departure is not only made in the event of global economic change, but during the time when the country was undergoing massive economic and social change as to re-orient towards more market-based economy and obtain admission into the rank of global economic superpowers. This marked change has raised a serious question among scholars and corporations as to why India adopted different approach when global players like the USA, UK are in favour of pro-voluntary approach. India appears to be a pioneer country to adopt CSR considerations as a part and parcel of company’s corporate governance and mandatory spending for the publicly traded companies. In spite of vehement oppose by corporate actors and commentators of CSR towards India’s spectacular change, there was a need for mandatory approach to control and change the attitude of corporation towards social change in the wake of liberalization, privatization and globalization (LPG).

Over the years, the transition is not only seen as voluntary to mandatory but also from shareholder centric to stakeholder centric[93]. The judicial transition can be seen from prior to the implementation of the Companies Act 1956 the emphasis of early judicial transition is mainly on the principle that the directors are merely agents of shareholders, in an 1885 decision of Bombay High Court, Justice Scott decided that in event of directors negligence, held that the interest of shareholders on one hand and the creditors on the other hand must be safeguarded against negligence and misconduct[94]. In another case from 1924 Allahabad High Court has stated that directors are the agents of the company and all the shareholders of the company stand in the same position as agents[95].  This trend continued in many cases interpreting 1956 Act with a few exceptions, one such is Harish Bansal et al. v. Moti Films Pvt Ltd[96]. The Delhi High Court quoted a passage from committee report on the MRTP[97] in the event of allowing persons other than creditors and contributors to be heard in the winding up petition of a company that: “in the development of corporate ethics, we have reached a stage where the question of social responsibility of business to the community can no longer be scoffed at or taken lightly, the companies can no longer be accepted as private domain, the working of which would be concern of society. The corporation has vital effect on the employment and economy of the community and health of the society, the corporation no longer functions in isolation”[98]. The court’s recognition of the social responsibility of companies is positive step inducing corporate commitment towards social welfare though the case was about winding up petition[99].

In 1994, T.S. Arumugham v. Lakshmi Vilas Bank Ltd slightly deviated from stakeholder centricity[100]. The issue of the case was about employee representation on the board[101]. The petitioner contention was that there had been an international shift in the understanding of a company from being property of shareholders to being regarded as a social organism with deep roots in the community[102]. In this case the debate between Adof Berle and Merrick Dodd was referred by the counsel, in which the former took the view that directors are agents of shareholders while the latter projected that directors are trustees of shareholders and the entire community[103]. The counsel went to explain how Berle later agreed with Dodd on who modern corporations run their business. The court of law also showed its willingness to adopt Dodd’s view by stating, “counsel may be right that the concept of the company has undergone a radical transformation and that there is considerable thinking on the concept of social responsibility of corporate management”[104]. The issue was left to the government to legislate and held that, until such legislation comes into force the existing one would be applied[105].

At the same time it may not be surprising that judicial refusal to recognise that companies owe and possess social responsibility to stakeholders even in large public sector companies funded by the state. In in re Indian Petrochemicals Corporation Limited workers, the merger was challenged by employee shareholders contending that it is against public interest[106]. The motive behind the merger was to benefit a private company Reliance Industries, to enable access to assets of a public company in a strategic sector (certain sectors are named strategic because of their importance to national economy and are forbidden to private companies). The High Court of Gujarat referring to T.S. Arumugham[107] stated “under the proposed scheme of amalgamation, Reliance Industries Limited will come to acquire a strategic sector industry without any reciprocating social responsibility”[108]. The court held that it was not compulsory to only consider the interest of shareholders and employees but also those of society[109]. This decision implied that the expectation of social responsibility in India is only expectation and existed for public sector companies. The private sector companies are profit maximising entities until the new Act was passed in 2013.

In 2009 the sudden startle by Satyam scam to the prevailing corporate system in India felt the need to straighten the stymied Indian Corporate Law. In this scam the promoter directors of the Satyam Computers confessed to falsifying the account books[110]. The Company Law Board (CLB) favoured the petition by Indian central government seeking removal of existing board and right to appoint new directors[111]. The judgment on Satyam scam recognizes that pernicious activities of corporate fraud were not only committed to shareholders but also to stakeholders[112]. The financial impropriety and jugglery was with malice motive to mislead the stakeholders and public in general[113]. The tribunal stated that “the affairs of the company conducted has shaken the confidence of the public in the company which is evident from the fall of share price of the company in 2009 from rupees 188 to 38.40”[114]. The CLB stated that the company was 4^th largest in India with 53,000 employees, with clients in over sixty countries and nearly 3000 shareholders, their interest along with interest of the company have to be protected[115]. The severity of the scam fostered an impetus to protect the interest of all the stakeholders of a company. The CLB finally granted a relief sought by government and stated that in the interest of the members, employees, customers of the company and also in the large public interest, the interim reliefs sought should be granted ex-parte[116]. This judgment emphasised the importance for recognition of stakeholder interests. K.K Baskaran v. State rep. by its Secretary, Tamil Nadu provided an opportunity to Supreme Court to consider corporation and society at large[117]. The contention of the case was about validity of legislation protecting depositors from financial companies indulging in Ponzi schemes, the apex court held: the state as custodian of its citizens cannot be silent spectator in finding solution for this malady, those financial swindlers having no social responsibility, but only lust for easy money through false promise of attractive returns had to be dealt with severity[118]. Thus it seems to imply that many fraudulent activities by companies are due to having no social responsibility.

The aberrant nature of companies made judiciary to consider the idea of CSR along with stakeholder interests. In Commissioner of Income Tax v. Modi Indutries Ltd, case concerning the tax treatment of company buildings providing housing for low income employees, the court stated that “interests of employees are now treated as an important facet and part of corporate social responsibility”[119]. In Tata Power Company Ltd v. Maharastra Electricity Regulatory State Commission, the court held that the CSR expenditure was the responsibility of the company and that such expenses could not be passed on to consumers[120].

Recently the National Green Tribunal embraced the language the of the CSR provision and stakeholder centric governance in Aam Janta v. State of MP & Ors, in this case residents from few villages filed a suit requesting the court to order Prism Cement Ltd with a cement manufacturing unit to stop polluting the area and improve sanitation[121]. The court after careful consideration of reports by state pollution control board ordered company to take all the necessary steps to improve living condition and maintain good relationship with villagers where the unit is located.[122] The court went on to say that the company should strive to integrate the economic, environmental and social objectives into their governance system and they cannot escape from social responsibility of maintaining clean environment[123]. Though the case was about Environment protection Act 1986, the CSR language used in the judgment is significant and indicating a trend towards recognising the prominence of CSR by corporations. This case gives a clear picture of articulating CSR with stakeholder centric view.  In India until 2011, except in few cases judiciary tried to explain the importance of CSR and stakeholder engagement leaving the legislation to the lawmakers to formulate. It tried to project that stakeholder engagement helps in building social capital and reduces risk by giving early warning signals of potential risks such as apprehension regarding products, services, social and environmental impacts[124].

The main influence on transition from voluntary to mandatory regime was trust deficit in business because of growing corporate scandals[125]. The Bhopal disaster of 1984, which is the biggest industrial disaster in India, which saw about 20,000 perish and several lakh of people grievously injured due to the leak of poisonous gas from the Union Carbide factory[126]. The MNC showed gross and criminal disrespect for safety and human rights and used its money power to escape responsibility, pay adequate compensation or even clean the factory of toxic materials[127]. Union Carbide was also using same chemicals at US factory in West Virginia, but the safety standards were maintained to a higher standard in US. Why the neglect in Bhopal? The answer is financial gain, company saved money by requiring less vigorous safety standards in India and by not investing in preventive maintenance[128].

Union Carbide escaped criminal prosecution and also the responsibility to rehabilitate the victims suffering from long term physical damage, including blindness, respiratory problems, birth defects and neurological problems[129]. The company initial response was to deny responsibility for the disaster but made emergency relief payments were made to the tune of $470 million. The company began to extricate from India calming that it had met its legal obligation and the responsibility eventually turned over to the Indian government[130]. The plant premise remains a dump yard of 350 ton of toxic materials more than 30 years later, which seeped through contaminating the soil and ground water around the factory.

In 2004, the protests against Coca Cola contaminating groundwater causing water depletion an environmental pollution has warned Indian government to formulate stricter laws against MNCs causing damage to the society. In this case the company has been subjected to many protest and court battles for its waste disposal practices causing environmental damage as result company’s facilities in many state was shut down. In 2003, Centre for science ad Environment found Coca Cola brands contained poisonous pesticide residues and the samples were found to be 11-70 times more than European Union norms[131]. University of Michigan carried out a study on one of its plants in State of Rajasthan, because of Coca Cola vociferous claims about its social responsibility and water conservation and set up a water intensive plant in such a water stressed area[132]. The company claimed that it had followed Environmental Due Diligence but never disclosed the contents.it was also claimed that the plant’s water consumption was very limited and had no impact or very minimal impact on the local ground water regime and that it had built rain water harvesting structures which recharged the groundwater 15 times more than what it extracted[133].

TERI in 2008 concluded that the plant operations continued to worsening water situation and created a source of stress to the communities around. The company was asked to shut down its plant or get from elsewhere[134]. The University of Michigan study found some dysfunctional primitive structures making it impossible to collect water to recharge and TERI confirmed that annual extraction of ground water was 1.35 times and exploitation ratio was 2.47 in 2004[135]. The ground water level in Rajasthan dropped significantly from 9 to 39 meter below ground level last 20 years[136].

In spite of Coca- Cola’s claims regarding its social responsibility towards water use it has constantly faced accusations to the contrary. Its Kerala plant was forced to close for environmental pollution, deterioration of quality and quantity of groundwater and the consequent public health problems, displacement and migration of labour and destruction of the agricultural economy[137]. Many of its plants closed down in India due to violation of environmental laws.

Many MNCs showed gross disrespect to human rights and society in India, apart from above mentioned scams, the others like Enron, Unilever’s Mercury factory used devious business practices to obtain financial gains. India’s experience is not unique but it can bet be summed up in the words of the authors of Managing Corporate Social Responsibility: A Communication Approach, who, in connection with the Union Carbide’s behaviour said: “We can’t assume corporations will naturally act in a responsible or even a humane manner. This not to say that all corporations are inherently evil and callous towards constituent safety. Bhopal reminds us that CSR may not be naturally occurring within the corporate environment. The allure of profit sometimes can be deadly for constituents”[138].

There are many occasions in which companies try to evade the mandatory social spending mainly on the basis that their corporations are not charitable trust. In order to say the earlier versions of companies act were not taken seriously by the corporations. Many powerful corporations maintain public relations with the government in the power and try to bribe them in case of any issue. It is an open secret that while 2013 bill was pending before the parliament few mining barons for their personal benefits tried to pressure some members of parliament not to give their assent to the bill in the house, in return for huge amounts and gifts. In regard to this the Government of India had come up with the voluntary guidelines in 2009 to 2011 which is insufficient to curtail and control the scams by corporation. As a result government of India took many measures to promote CSR, including tax concessions, guidelines and finally making it mandatory through la to spend a certain part of profits being 2 percent on it.

Passage of Companies Act 2013

The country underwent a devastating financial crisis in 1990-91and was in a precarious position that led the country to the verge of bankruptcy. The financial crisis was the result of a convergence of many issues like internal political and economic stability, the breakup of Soviet Union and the outbreak of the First Gulf war[139].  This crisis forced India to liberalize its economy to achieve domestic stability and to be more competitive in global market, as result India experienced a striking boom with a growth rate of 8% or more[140]. Post-liberalization result shift in the “companies from solely responsible to their owners to the current stakeholder participation based model”[141]. With this reforms private entrepreneurship increased and the state control over economic activity reduced gradually.

Over the years India has become business friendly destination for multinational corporations, increase in investment and development in India was witnessed but this growth was not received positively by the people[142]. The friendliness to business was not only about lower taxes but also lower and less expensive safety standards[143]. With the corporate liberalization in 1990s and the experience with multinational companies, the need was felt by the government to update the Companies Act 1956. International investment were given prominence and discussed in great length in the statement of object of 2009 proposal and in this 2009 version Ministry of Corporate Affairs had issued CSR guidelines for companies operating in India[144]. Due to strong opposition, the ministry was compelled to eliminate the requirement of 2 % spending on CSR but disclosures regarding CSR remained intact. The 2009 bill after significant revisions emerged as the Companies Bill 2011[145]. In spite of corporate uproar in 2009, the provision on mandatory spending appeared in 2011 Bill[146]. Through this bill MCA[147] has cautioned that CSR guidance to be implemented by all types of businesses, with it attracted criticism both in India and abroad. ‘the core criticism was that to make CSR mandatory attacks the very core of the CSR movement since 1960s, which is that the good that is done by business entities is voluntary’[148]. Ministry of Corporate Affairs has produced the national voluntary guidelines on social, environmental and economic responsibilities of business, which are detailed in the nine principles[149]. After some revisions to the language in 2011 Bill, it became law in August 2013. The main aim of the new Act is to make India’s regulatory system of business entities into a workable framework and bring greater transparency in business, support social change, including push of greater inclusion of women on board and CSR[150]. Section 135 of Companies Act 2013 dealing with CSR mandate on corporations has been greatly debated not only in India but also over the global after its passage.

The ministry of corporate affairs have added CSR provisions in the 2013 Act due to the pressure from standing committee of finance[151]. it was argued that “government should mandate anything” but the MCA had taken a “considered view” in introducing the provision.[152] The secretary of the standing committee replied that “the whole emphasis of the Act is the discloser method”[153]. The CSR provision underwent many changes in the 2009 and 2011 versions of the bill which notified that the board shall ensure making it a mandatory  legislation. After a heated debate the then minister of corporate affairs Mr Sachin Pilot justified the provision as clearing the air and correcting the divide between the rich and the poor is getting bigger and bigger[154]. The minister stated that this can only be done if companies themselves move forward and show that they are responsible, sensitive and they want to give back to the society[155]. Finally after the huge drama in the parliament section 135 survived in the final version of the bill and has been passed by the parliament in 2013. The CSR provisions came into effect from April 2014 and provides that every company with the net worth of 500 crore rupees or more turnover of 1000 corer rupees or a net profit of 5 crore rupees or more during any financial year shall spend at least 2 percent of average net profit, constitute a CSR Committee with an Independent Director as a member to formulate and monitor CSR activities[156]. And that the company shall give preference to the local areas around its operations for CSR spending.

While CSR spending is not mandatory, filing a report on CSR activities or failing to explain in Board report why CSR spending was not carried out is mandatory and failure to do so attracts penalty of 50,000 rupees which may be extended to 25 lakh rupees and the person responsible for the failure can be punished for a prison term of up to 3 years or with fine between 50,000 rupees which may extend to 5 lakh[157].

Why the Codification

The collapse of socialism and welfare state accompanied economic liberalisation of 1980s and 1991s had a profound impact on the development of CSR in India[158]. The government started withdrawing from social sectors, even the public sector enterprises which were designed as the engine of both industrial and social development. The Committee on public Undertakings had to look into the functioning of PSEs[159] in 1992 and comments that “being part of the state, every public sector enterprise has a moral responsibility to play an active role in discharging the social obligations endowed on welfare state, subject to the financial health of the enterprise”[160]. Based on this comment and recommendations by Committee on Public Undertaking, the Department of Public Enterprise (DEP) issued a general guideline in 1994 asking the board of directors of PSEs to devise socially responsible business practices according to their Articles of Association[161]. The DEP followed it up with more specific provisions in 2010 and 2013.

The Parliamentary Standing Committee which examined the Companies Bill 2009 and recommended inclusion of CSR in its 2010 report also expressed overwhelming concern on the extent of CSR being undertaken by corporates in response to which the ministry off Corporate Affairs have agreed that the bill may now include provisions to mandate that every company shall be required to formulate a CSR policy to ensure that every year at least 2 percent of its average net profits spent on the CSR activities[162]. The 57^th report of the Parliamentary Standing Committee which examined the modified Companies Bill 2011 said that “the Committee are of the view that corporates in general are expected to contribute to the welfare of the society in which they operate and wherefrom they draw their resources to generate profits”[163].

A 2013 study which looked into the CSR activities of corporates commented that “few companies are practising CSR concept adequately” and the biggest problem is lack of budget allocation for CSR. It identified that failure of the government to come up with statutory guidelines to give definite direction to companies taking up CSR activities as one of the reasons for their failure[164].

It was the shirking role of Government in the social development with education and health in particular left more to the market mechanisms, and reluctance of the corporates to show adequate interest in socially responsible behaviour that the need for codifying CSR was felt[165].

[1] Caroline Van Zile, “India’s Mandatory Corporate Social Responsibility Proposal: Creative Capitalism Meets Creative Regulation in the Global Market”, 13 APLPJ 269 2011-2012

[2] Ibid, Remarks by Bill gates, Chairman of Microsoft Corporation, World Economic Forum 2008, “A New Approach to Capitalism in the 21^st Century”, Davos, Switzerland, Jan 24^th, 2008, available via: https://news.microsoft.com/2008/01/24/bill-gates-world-economic-forum-2008/#jOxE6eggLdVi8xcT.97, accessed on 9-06-2017

[3] Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, LexisNexis, Ed: 1, 2017

[4] Remarks by Bill gates, Chairman, Microsoft Corporation, World Economic Forum 2008, “A New Approach to Capitalism in the 21^st Century”, Davos, Switzerland, Jan 24^th, 2008, available via: https://news.microsoft.com/2008/01/24/bill-gates-world-economic-forum-2008/#jOxE6eggLdVi8xcT.97, accessed on 9-06-2017

[5]Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, LexisNexis, Ed: 1, 2017

[6] Herein after referred as CSR

[7] Standing Committee on Finance, Ministry of Corporate Affairs, (The companies Bill, 2009), Twenty First Report,  Lok Sabha Secretariat, August 2010,  available via: http://www.nfcgindia.org/pdf/21_report_companies_bill-2009.pdf,  accessed on 9-06-2017

[8] Ibid.

[9] Caroline Van Zile, “India’s Mandatory Corporate Social Responsibility Proposal: Creative Capitalism Meets Creative Regulation in the Global Market”, 13 APLPJ 269 2011-2012

[10] Shubhashus Gangopadhya, “Profiting from CSR: Mandatory Spending on Corporate Social Responsibility Does Not Fit in a Market Driven Society”, Business Standard, Jan 28, 2012,  available via: http://www.business-standard.com/article/opinion/shubhashis-gangopadhyay-profiting-from-csr-112012800080_1.html, accessed on 9-06-2017

[11] Caroline Van Zile, “India’s Mandatory Corporate Social Responsibility Proposal: Creative Capitalism Meets Creative Regulation in the Global Market”, 13 APLPJ 269 2011-2012

[12] John Rolph Edwards, “ The Costs of Public Income Redistribution and Private Charity”, Journal of Liberation Studies, Vol: 21, 3-21, (2007)

[13] Supra Note: 11

[14] Umakanth Varottil, “A Cautionary Tale of the Transplant Effect on Indian Corporate Governance”, 21 NAT’L L. SCH. OF INDIA REV.1.25 (2009)

[15] Epstein. E, “The Corporate Social Policy Process and the Process of Corporate Governance”, American Business Law Journal, (1987) 25, 361-383

[16] Rupal Tyagi, “Corporate Social Responsibility-Analysing Performance in India”, Lap Lambert Academic Publishing, (2015), Pg: 89-90

[17] Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, LexisNexis, Ed: 1, 2017

[18] Ibid

[19] Constantina Bichta, “CSR: A Role in Government Policy and Regulation?” University of Bath, School Of Management,  September 2003, available via: https://www.scribd.com/document/334384989/Bichta-CSR-a-Role-in-Government-Policy-and-Regulation-pdf, accessed on 12-07-2017

[20] Ibid

[21] The Gilded Age: A Tale of Today, is an 1873 novel by Mark Twain and CharlesDudley Warner that criticizes greed and political corruption in post-Civil war America, cited in Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, LexisNexis, Ed: 1, 2017

[22] Constantina Bichta, “CSR: A Role in Government Policy and Regulation?” University of Bath, School Of Management,  September 2003, available via: https://www.scribd.com/document/334384989/Bichta-CSR-a-Role-in-Government-Policy-and-Regulation-pdf, accessed on 12-07-2017

[23] Nader R, Green M, Seligman J, “The Corporate Impact, Issues in Business and Society , 2^nd edition, 2007, cited in Tom McEwan, “Managing Believes and Values in Organisation” , Person Education, Business and Economics, 2001

[24] Constantina Bichta, “CSR: A Role in Government Policy and Regulation?” University of Bath, School Of Management,  September 2003

[25] Ibid

[26] Ramon Mullerat, “International Corporate Social Responsibility: The role of Corporations in the Economic Order of 21^st century”, Kluwer Law International, Business and Economics, 2010

[27] Supra Note: 24

[28] Steve May, George Cheney and Juliet Roper, “The Debate over Corporate Social Responsibility”, Oxford University Press, 2007

[29] Supra Note: 43

[30] AP Smith Mfg. Co. v. Barlow 13 N. J. 145 (1953), available via: http://law.justia.com/cases/new-jersey/supreme-court/1953/13-n-j-145-0.html, accessed on 4-07-2017

[31] Ibid

[32]  AP Smith Mfg. Co. v. Barlow 13 N. J. 145 (1953), available via: http://law.justia.com/cases/new-jersey/supreme-court/1953/13-n-j-145-0.html, accessed on 4-07-2017

[33] Davis G.F, Whitman M.V.N & Zald M.N, “The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility”, (2006) In Possession  of Ross School of Business, Working Paper- 1031

[34] Davis G.F, Whitman M.V.N & Zald M.N, “The Responsibility Paradox: Multinational Firms and Global Corporate Social Responsibility”, (2006) In Possession  of Ross School of Business, Working Paper- 1031

[35] George Serafeim, “The Role of the Corporation in Society: An Alternative View and Opportunities for Future Research, Harvard Business School, Working paper 14-110(May 5, 2014), available via: http://www.hbs.edu/faculty/Publication%20Files/14-110_e7a7f1b3-be0d-4992-93cc-7a4834daebf1.pdf, accessed on 4-07-2017

[36] Craig E. Carroll, “The Sage Encyclopaedia of Corporate Reputation”, Sage Publication, Business and Economics, May 2016, Pg: 271

[37] H. Johnson, “Business in Contemporary Society: Framework and issues”, Wadsworth, Belmont, CA, 1971

[38] John Elkington, “Cannibals with Forks: The Triple Bottom Line of 21^st Century Business”, Capstone, Oxford, 1997

[39] Alison E. McArdle, “A Stick in the Global Carrot Patch: The Business of Corporate Social Responsibility in India’s Companies Act 2013”, 38 Suffolk Transnat’l L.Rev. 467 2015, The U.N Global Compact consists nearly 12, 000 participants from 145 countries around the world.

[40] ibid

[41] Herein after referred as EU

[42] European Commission, “Corporate Social Responsibility: A new Definition, A New Agenda for Action” Press Release Database, Brussels, (October 2011), available via: http://europa.eu/rapid/press-release_MEMO-11-730_en.htm, accessed on 10-06-2017

[43] Michael E. Porter & Mark R. Kramer, “Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility”, Harvard Business Review, December 2006, available via: https://sharedvalue.org/sites/default/files/resource-files/Strategy_and_Society.pdf, accessed on 8-06-2017

[44] Cramer, Jacqueline, Jan Jonker, and Angela Van Der Heijden, “Making Sense of Corporate Social Responsibility”, Journal of Business Ethics 55, no. 2 (2004): 215-22, available via: http://www.jstor.org/stable/25123384, accessed on 8-06-2017

[45] Ibid, Seema G. Sharma, “Corporate Social Responsibility in India: An Overview”, 43 Int’l Law. 1515 2009

[46] Rupal Tyagi, “Corporate Social Responsibility-Analysing Performance in India”, Lap Lambert Academic Publishing, (2015), Pg: 90-91

[47] Fisman. R, Heal. G, Nair. V.b, “Corporate Social Responsibility: Doing Well by Doing Good?” (2011), available via: http://apps.olin.wustl.edu/jfi/pdf/corporate.social.responsibility.pdf, accessed on 25-6-2017

[48] Carol. A.B, “Corporate Social Responsibility: Evolution of a definitional Construct”, Business and Society, (1991), 38, 268-295

[49] Ibid

[50] Ibid

[51] Muruganathanam. G, “Case Study on Corporate Social Responsibility of MNC’s in India”. Proceeding of the International Trade & Academic Research Conference(ITARC)- London (2010)

[52] European Commission, “ Promoting a European Framework for Corporate Social Responsibility”, Commission Green Paper, (2001)

[53] Carroll. A.B, “A Tree Dimensional Conceptual Model of Corporate Social Performance”, Academy of Management Review, (1979) 4, 497-505

[54] Mc Williams, Siegel, “Corporate Social Responsibility: A theory of the firm PRESPECTIVE”, Academy of Management Review, (2001), 26(1), 117-127

[55] Srivastava . H, Venkatswaran. S, “The Business of Social Responsibility- The why, What and How of Corporate Social Responsibility in India”, Books for Change (2000) Bangalore , India

[56] Rupal Tyagi, “Corporate Social Responsibility-Analysing Performance in India”, Lap Lambert Academic Publishing, (2015), Pg: 93

[57] Lord Holme  R and Watts P, “Corporate Social Responsibility: Making Good Business Sense”, World Business Council for Sustainable Development: Switzerland, edition: 2, (January 2010)

[58] Tsoustsoura M, “Corporate Social Responsibility and Financial Performance”, In Possession of Centre for Responsible Business, Working Paper Series 7, (2004), University of California, Berkeley.

[59] Rupal Tyagi, “Corporate Social Responsibility-Analysing Performance in India”, Lap Lambert Academic Publishing, (2015), Pg: 97

[60] Carroll A.B & Schwartz M.S, “Corporate Social Responsibility: A Three-Domain Approach”, Business ethics Quarterly, Vol:13, 4, 503-530 (2003)

[61] Wayne Visser, “Revisiting Carroll’s CSR Pyramid- An African Perspective”, The University of Nottingham, United Kingdom, Sustainability Services, KPMG South Africa, available via: http://www.waynevisser.com/wp-content/uploads/2012/04/chapter_wvisser_africa_csr_pyramid.pdf, accessed on 1-07-2017

[62] Alison E. McArdle, “A Stick in the Global Carrot Patch: The Business of Corporate Social Responsibility in India’s Companies Act 2013”, 38 Suffolk Transnat’l L.Rev. 467 2015

[63] Carroll. A.B, “A Tree Dimensional Conceptual Model of Corporate Social Performance”, Academy of Management Review, (1979) 4, 497-505

[64] Ibid

[65]Image adopted from http://www.csrquest.net/imagefiles/CSR%20Pyramid.jpg, accessed on 8-06-2017

[66] Carroll A.B, “ The Pyramid of Corporate Social Responsibility: Towards the Moral Management of Organisational Stakeholders”, Business Horizons, Vol: 34(4): 39-48 (July 1991)

[67] Seema G. Sharma, “Corporate Social Responsibility in India: An Overview”, 43 Int’l Law. 1515 2009

[68] Damien Krichewsky, “ Pushpa Sundar, Business & Community: The Story of Corporate Social Responsibility in India” South Asia Multidisciplinary Academic Journal, Book Reviews, (03 February 2014), available via: http://samaj.revues.org/3686, accessed on 10-06-2017

[69] Singh Swetha, “Philanthropy to Corporate Social Responsibility: An Indian Perspective”, Review of International Comparative Management,  11(5), 990-1000 (2010)

[70] Reed A.M, “Corporate Governance Reforms in India”, Journal of Business Ethics, 37, 249-268, (2002)

[71] Lovins A.B, Hunter L. & Hawken. P, “A Road Map for Natural Capitalism”, Harvard Business Review, 77(3), 145-158 (1999)

[72] Rowe. J, “Corporate Social Responsibility as Business Strategy”, Center for Global International and Regional Studies (2005) available via: http://escholarship.org/uc/item/5dq43315#page-8, accessed on 4-07-2017

[73] Dsilva B, “Corporate Social Responsibility in India- An Empirical research”(2008), available via: http://ezinearticles.com/?Corporate-Social-Responsibility-in-India—An-Empirical-Research&id=1212688, accessed on 4-07-2017

[74] Ibid

[75] Seema G. Sharma, “Corporate Social Responsibility in India: An Overview”, 43 Int’l Law. 1519 2009

[76] Singh Swetha, “Philanthropy to Corporate Social Responsibility: An Indian Perspective”, Review of International Comparative Management,  11(5), 990-1000 (2010)

[77] Singh Swetha, “Philanthropy to Corporate Social Responsibility: An Indian Perspective”, Review of International Comparative Management,  11(5), 990-1000 (2010)

[78] Ibid

[79] Tripati D, “The Oxford History of Indian Business”, Oxford University Press, New Delhi  (2004)

[80] Chahoud. Tatjan, “Corporate Social and Environmental Responsibility in India- Assessing the UN Global Compact’s Role, German Development Institute, Bonn (2007), available via: https://www.die-gdi.de/uploads/media/Studies_26.pdf, accessed on 11-06-2017

[81] Ibid

[82] ibid

[83] ibid

[84] Chahoud. Tatjan, “Corporate Social and Environmental Responsibility in India- Assessing the UN Global Compact’s Role, German Development Institute, Bonn (2007), available via: https://www.die-gdi.de/uploads/media/Studies_26.pdf, accessed on 11-06-2017

[85] Sunyoung Lee, “Corporate Social Responsibility in India”, Oxford Achilles Working Group on Corporate Social Responsibility, (2008), available via: https://www.sbs.ox.ac.uk/achilles/downloads, accessed on 11-06-2017

[86] David F Murphy, Ritu Kumar, Viraal Balsari, “Altered Images: The 2001 State of Corporate Social Responsibility in India Poll” (2001), available via: http://www.terieurope.org/docs/CSR-India.pdf, accessed on 11-06-2017

[87] Ibid

[88] Alison E. McArdle, “A Stick in the Global Carrot Patch: The Business of Corporate Social Responsibility in India’s Companies Act 2013”, 38 Suffolk Transnat’l L.Rev. 467 2015

[89] Supra Note: 41

[90] Ibid

[91] Caroline Van Zile, “India’s Mandatory Corporate Social Responsibility Proposal: Creative Capitalism Meets Creative Regulation in the Global Market”, 13 APLPJ 269 2011-2012

[92] Afra Afsharipour, “Corporate Governance Converge: Lessons from the India Experience”, 29 NW. J.INT’L L. & BUS. 354 (2009)

[93] Sandeep Gopalan, Akshay Kamlnath, “Mandatory CSR as a Vehicle for Reducing Inequality : An Indian Solution for Piketty and the Millennials”, Northwest Journal of Law and Policy, 10 NW.J.L& Soc. Pol’y 34 2015

[94] New Fleming Spinning & Weaving Co Ltd v. Kessowji Naik & Ors, (1885)  I.L.R 9 (BOM) 373

[95] Dikishit  & Co Ltd v. Mathura Prasad A.I.R 1925 (ALL) 71

[96] 25 (1984) D.L.T  92

[97] Monopolies Restrictive Trade Practices Act

[98] Rajindar Sachar, “Report of the High-powered Expert  Committee on Companies act and MRTP act”, available via: http://reports.mca.gov.in/Reports/30-Rajindar%20Sacher%20committee, accessed on 10-07-2017, see also Sandeep Gopalan, Akshay Kamlnath, “Mandatory CSR as a Vehicle for Reducing Inequality : An Indian solution for Piketty and the Millennials”, Northwest Journal of Law and Policy, 10 NW.J.L& Soc. Pol’y 34 2015

[99] Ibid

[100] (1994) 80 Comp. Cas. 814 (Mad)

[101] Ibid at Pg:13

[102] Ibid at Pg:21

[103] Sandeep Gopalan, Akshay Kamlnath, “Mandatory CSR as a Vehicle for Reducing Inequality : An Indian Solution for Piketty and the Millennials”, Northwest Journal of Law and Policy, 10 NW.J.L& Soc. Pol’y 34 2015

[104] (1994) 80 Comp. Cas. 814 (Mad)

[105] Ibid

[106] 2008 84 SCL 133 Guj, available via: https://indiankanoon.org/doc/253591/ Accessed on 01-08-2017

[107] (1994) 80 Comp. Cas.814 (Mad)

[108] 2008 84 SCL 133 Guj, available via: https://indiankanoon.org/doc/253591/ Accessed on 01-08-2017

[109] Ibid

[110] Union of India v. Satyam Computers Services Ltd, (2009) 148 Comp. Cas.252 (CLB)

[111] The Company Law Board is a quasi-judicial body in India having power to regulate the behaviour of companies. It was introduced in Indian Companies Act 1956 in 1988 via Section 10E.

[112] Union of India v. Satyam Computers Services Ltd, (2009) 148 Comp. Cas.252 (CLB)

[113] Ibid

[114] Ibid

[115] Ibid

[116] Union of India v. Satyam Computers Services Ltd, (2009) 148 Comp. Cas.252 (CLB)

[117] A.I.R. 2011 S.C. 1485

[118] Ibid

[119] (2010) 046 DRT 0241

[120] Appeal No: 32 of 2011, available via: https://indiankanoon.org/doc/147562423/, accessed on 02-08-2017

[121]C.S NO .35 OF 2013, see also Sandeep Gopalan, Akshay Kamlnath, “Mandatory CSR as a Vehicle for Reducing Inequality : An Indian Solution for Piketty and the Millennials”, Northwest Journal of Law and Policy, 10 NW.J.L& Soc. Pol’y 34 2015

[122] Ibid

[123] Ibid

[124] “Why Engage With Your Stakeholder is Important for CSR Reporting”, Greenstone, 2014, available via : http://info.greenstoneplus.com/blog/why-engaging-with-your-stakeholders-is-important-for-csr-reporting, accessed on 19-07-2017

[125] Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, Chapter 3,  LexisNexis, Ed: 1, 2017

[126] Ibid

[127] Sandipa Lahiri, “Bhopal Gas Disaster and Dow  Chemical: Need for CSR”, available via: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=752784, accessed on 20-07-2017

[128] Ibid

[129] Ibid

[130] Steven K. May, George Cheney & Juliet Roper, “The Debate Over Corporate Social Responsibility”, Oxford Press, Business & Management, 2007

[131] “Analysis of Pesticide Residues in Soft Drinks”, available via:  http://www.cseindia.org/userfiles/SOFTDRINK.pdf, accessed on 20-07-2017

[132] Aneel Karnani , “Corporate Social Responsibility Does Not Avert the Tragedy of the Commons- Case Study : Coca Cola India”,  Stephen M. Ross School Business-Working Paper Series, University of Michigan, 2012, available via: https://deepblue.lib.umich.edu/handle/2027.42/90509, accessed on 20-07-2017

[133] Aneel Karnani , “Corporate Social Responsibility Does Not Avert the Tragedy of the Commons- Case Study : Coca Cola India”,  Stephen M. Ross School Business-Working Paper Series, University of Michigan, 2012, available via: https://deepblue.lib.umich.edu/handle/2027.42/90509, accessed on 20-07-2017

[134] TERI is independent third party assessment of Coca-Cola facilities in India. TERI stands for The Energy and Resource Institute, Delhi 2008

[135] Aneel Karnani , “Corporate Social Responsibility Does Not Avert the Tragedy of the Commons- Case Study : Coca Cola India”,  Stephen M. Ross School Business-Working Paper Series, University of Michigan, 2012, available via: https://deepblue.lib.umich.edu/handle/2027.42/90509, accessed on 20-07-2017

[136] Ibid

[137] Available via:  http://www.thehindu.com/opinion/op-ed/Coca-Colas-response-disappoints-Plachimada-activists/article16372088.ece, accessed on 20-07-2017

[138] W. Timothy Coombs and Sherry J Holladay, “Managing Corporate Social Responsibility: A Communication Approach”, Wiley- Blackwell, September 2011

[139] Alison E. McArdle, “A Stick in the Global Carrot Patch: The Business of Corporate Social Responsibility in India’s Companies Act 2013”, 38 Suffolk Transnat’l L.Rev. 467 2015

[140] Ibid

[141] David F Murphy, Ritu Kumar, Viraal Balsari, “Altered Images: The 2001 State of Corporate Social Responsibility in India Poll” (2001), available via: http://www.terieurope.org/docs/CSR-India.pdf, accessed on 11-06-2017

[142] Andrew Crane, Drik Matten, Laura J. Spence, “Corporate Social Responsibility: Readings and Cases in Global Context”, Routledge, (2008) 3-20, available via: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=1667081, accessed on 12-06-2017

[143] Ibid

[144] Indian Ministry of Corporate Affairs, “Corporate Social Responsibility Voluntary Guidelines”, (December 2009) available via: https://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf, accessed on 11-06-2017

[145] Caroline Van Zile, “India’s Mandatory Corporate Social Responsibility Proposal: Creative Capitalism Meets Creative Regulation in the Global Market”, 13 APLPJ 269 2011-2012

[146] Dharmapala, Dhammika and Khanna, Vikramaditya S, “The Impact of Mandated Corporate Social Responsibility: Evidence from India’s Companies Act of 2013” (2016). Coase-Sandor Working Paper Series in Law and Economics. 813, available via: http://chicagounbound.uchicago.edu/law_and_economics/813, accessed on 11-06-2017

[147] Ministry of Corporate Affairs

[148] Shubhashus Gangopadhya, “Profiting from CSR: Mandatory Spending on Corporate Social Responsibility Does Not Fit in a Market Driven Society”, Business Standard, Jan 28, 2012,  available via: http://www.business-standard.com/article/opinion/shubhashis-gangopadhyay-profiting-from-csr-112012800080_1.html, accessed on 9-06-2017

[149] They are: 1. Businesses should conduct and govern themselves with Ethics, Transparency and Accountability, 2. Businesses should provide goods and services that are safe and contribute to sustainability throughout their life cycle, 3. Businesses should promote the wellbeing of all employees, 4. Businesses should respect the interests of, and be responsive towards all stakeholders, especially those who are disadvantaged, vulnerable and marginalized, 5. Businesses should respect and promote human right, 6. Business should respect, protect, and make efforts to restore the environment, 7. Businesses, when engaged in influencing public and regulatory policy, should do so in a responsible manner, 8. Businesses should support inclusive growth and equitable development, 9. Businesses should engage with and provide value to their customers and consumers in a responsible manner. Indian Ministry of Corporate Affairs, “Corporate Social Responsibility Voluntary Guidelines”, (December 2009) available via: https://www.mca.gov.in/Ministry/latestnews/CSR_Voluntary_Guidelines_24dec2009.pdf, accessed on 11-06-2017

[150] Alison E. McArdle, “A Stick in the Global Carrot Patch: The Business of Corporate Social Responsibility in India’s Companies Act 2013”, 38 Suffolk Transnat’l L.Rev. 467 2015

[151] It was not mentioned as mandatory in earlier companies bill, available via: http://clb.nic.in/the_companies_act_2013.pdf, accessed on 10-07-2013

[152] Standing Committee on Finance, “The Companies Bill”, available via: http://www.nfcgindia.org/pdf/21_report_companies_bill-2009.pdf, accessed on 10-07-2017

[153] Ibid

[154] Sandeep Gopalan, Akshay Kamlnath, “Mandatory CSR as a Vehicle for Reducing Inequality : An Indian Solution for Piketty and the Millennials”, Northwest Journal of Law and Policy, 10 NW.J.L& Soc. Pol’y 34 2015

[155] Ibid

[156] Section 135 of Companies Act 2013

[157] Setion 134 read with section 135 of Companies Act 2013

[158] Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, Chapter: 1,  LexisNexis, Ed: 1, 2017

[159] Public Sector Enterprises

[160] “Corporate Social Responsibility in Government Companies”, report no CA 22 of 2009-2010, available via: https://elibrarywcl.files.wordpress.com/2015/02/csr-in-govt-organisation.pdf, accessed on 21-07-2017, see also: Suraj Guha Takurta, “Corporate Social Responsibility”, available via: https://www.scribd.com/document/93314574/Corporate-SOCIAL-Responsibility-Final, accessed on 23-07-2017

[161]Suraj Guha Takurta, “Corporate Social Responsibility”, available via: https://www.scribd.com/document/93314574/Corporate-SOCIAL-Responsibility-Final, accessed on 23-07-2017

[162] Standing Committee of Finance, 21^st report, 2010

[163] Standing Committee of Finance, 57^th report, 2012

[164] Rajeev Prabhakar and Sonam Mishra, “A Study of Corporate Social Responsibility in Indian Organisation: An Introspection”, Proceedings of 21^st International Business Research Conference, June 2013, Ryerson University, Toronto, Canada. Available via: https://wbiworldconpro.com/uploads/canada-conference-2013/management/1370168444_430-Sonam.pdf, accessed on 21-07-2017

[165] Kshama V Kaushik, “CSR in India; Steering Business towards Social Change, LexisNexis, Ed: 1, 2017