India's Corporate Social Responsibility (CSR) journey has evolved through four significant phases, shaped by socio-economic, cultural, and political contexts. Over time, CSR has shifted from philanthropy-driven initiatives to a more structured and strategic business function that aligns with both corporate goals and societal needs.

Phase 1: CSR Driven by Charity and Philanthropy (1850-1914)

During the pre-industrial era and early stages of industrialization, CSR was largely synonymous with charity and philanthropy. Influential business families, such as the Tatas, Birlas, and Godrejs, engaged in welfare activities, establishing schools, temples, and hospitals. The roots of CSR during this period were deeply intertwined with culture, traditions, family values, industrialization, and religion. The concepts of dhan (wealth), dharam (duty), and dakshina (charitable offering) were fundamental in shaping the CSR landscape.

Phase 2: Gandhi's Theory of Trusteeship (1914-1960)

Mahatma Gandhi's theory of trusteeship revolutionized CSR by linking it to social justice and nation-building. During this period, family businesses established trusts for building schools, colleges, and training institutions. Gandhi advocated that industrialists view themselves as trustees of society's wealth, promoting equitable distribution and contributing to India's independence movement and community development through initiatives in education, healthcare, and rural upliftment.

Phase 3: CSR in a Mixed Economy (1960-1980)

Post-independence, India adopted a mixed economy model where the state played a pivotal role in social welfare. Public sector undertakings (PSUs) were expected to lead CSR efforts, while private sector involvement dwindled due to a focus on growth and stringent regulations. This era also saw the emergence of several public enterprises and the introduction of corporate governance, labour, and environmental legislation.

Phase 4: Philanthropic and Business Approaches (1980 till present)

From the 1990s onwards, economic liberalization, privatization, and globalization transformed the CSR landscape in India. Businesses began to view CSR not just as a philanthropic activity but as a sustainable strategy. Companies integrated CSR with business objectives, addressing issues like sustainability, education, healthcare, and social development. CSR evolved from ad-hoc charity to strategic initiatives that aligned with corporate goals and long-term sustainability.

Evolution of CSR Legislation in India

The legal framework for CSR in India has undergone significant changes, driven by an increasing recognition of businesses' role in societal development.

2007: The 11^th Five-Year Plan introduced the concept of inclusive growth, which set the stage for integrating social objectives into economic development.

2009: Voluntary guidelines on CSR were released by the Ministry of Corporate Affairs, encouraging companies to voluntarily address societal concerns.

2010: The Parliamentary Standing Committee reviewed the 21^st Report on the Companies Bill, 2009, proposing CSR as a key aspect of corporate governance.

2011: The National Voluntary Guidelines (NVGs) on social, environmental, and economic responsibilities of business provided a comprehensive framework for responsible business practices.

2012: Business Responsibility Reporting (BRR) was mandated for top-listed companies to disclose their CSR activities in alignment with NVGs.

2014: CSR became mandatory under Section 135 of the Companies Act, 2013, requiring eligible companies to allocate 2 per cent of their average net profits towards CSR activities, marking India as the first country with a legislated CSR mandate.

Mandatory CSR Provision under the Companies Act, 2013

Section 135 of the Companies Act, 2013, mandates that companies with an annual turnover of `1,000 crore or more, net worth of `500 crore or more, or net profit of `5 crore or more, must constitute a CSR committee. These companies are required to spend at least 2 per cent of their average net profits over the previous three years on CSR activities. This provision aims to supplement the government's efforts to ensure that corporate growth benefits society as a whole.

CSR Spending Trends

CSR spending in India between 2017 and 2023 has shown varying trends across different expenditure brackets.

`0-50 lakh: This category saw the highest participation in 2018-2019, with 21,986 companies contributing.

`1-10 crore: Maximum participation occurred in 2022-2023, with 5,025 companies contributing.

`10-100 crore: In 2022-2023, 337 companies participated, marking the highest number in this range for over six years.

`100-500 crore: The highest participation in this bracket occurred in 2022-2023, with 37 companies contributing.

Above `500 crore: The maximum participation occurred in 2019-2020, with 6 companies making significant contributions.

These trends show that Indian companies' commitment to CSR is increasing, with varying participation based on financial capabilities.

Way Forward: CSR Beyond 2030

As CSR participation increases, the focus on education and healthcare remains strong, while emerging areas such as livelihood development, rural growth, and natural resource conservation are gaining attention. With concerns over climate risk and environmental sustainability, CSR spending is expected to rise in these areas. Regulatory amendments, such as allowing unspent CSR amounts to be carried over for three years for ongoing projects, are also shaping the future of CSR.

CSR in India is evolving into a more structured, collaborative effort involving the government, businesses, NGOs, and partner organizations. The focus is shifting towards long-term impact, with companies focusing on flagship programmes that align with both societal needs and corporate goals. CSR is poised to become a catalyst for societal change, driving new socio-economic models in the coming decades.

References

History of CSR. National CSR Portal. https://www.mca.gov.in/content/csr/global/master/home/aboutcsr/history.html

CSR Expenditure Summary. National CSR Portal. https://www.mca.gov.in/content/csr/global/master/home/home.html

eGyanKosh Portal. https://www.egyankosh.ac.in/bitstream/123456789/74137/1/Unit-3.pdf

Thakur, (2014), Integrating and implementing CSR: A case study of Corporate India, August 2014, CSR Times, pp. 24-25.

Das, R. (2016). The Role of Philanthropy in India's Industrialization and Economic Development. Journal of Business Ethics, 134(4), 563–577.

Tiwari, R. (2017). The Evolution of Corporate Social Responsibility in India: A Historical Perspective. International Journal of Management, IT & Engineering, 7(3), 83–94.

Ministry of Corporate Affairs. https://www.mca.gov.in/content/mca/global/en/home.html #