Importance of Corporate Social Responsibilities towards Corporate Sector in India

Citation

Kumar, H., & Bindal, M. (2026). Importance of Corporate Social Responsibilities towards Corporate Sector in India. International Journal of Research, 13(2), 207–217. https://doi.org/10.26643/rb.v118i10.9575

Hemant Kumar-Research Scholar, Lords University-Alwar (Raj.)

Dr. Meenakshi Bindal- Research Supervisor, Lords University-Alwar (Raj.)

Abstract: –

Indian companies engage in diverse CSR activities focused on Education, Healthcare, Environmental Sustainability, Skill Development, and Rural/Community Development, with major players like Tata, Wipro, HUL, and Infosys leading in areas from water conservation and women’s empowerment to COVID-19 relief and skill training, guided by India’s Companies Act. Key trends show increased focus on environment, skill-building, and tech-driven impact measurement, though spending fluctuates. 

Corporate Social Responsibility (CSR) is vital for Indian companies as it boosts brand image, customer loyalty, and talent attraction, while mitigating risks and ensuring long-term sustainability by integrating societal welfare with business strategy, leading to better financial performance, innovation, and competitive edge in a growing conscious market. 

Key-Words: -CSR, COVID-19, HUL, BHEL.

Introduction: –

Key CSR Focus Areas:-

• Education & Skill Development: Building schools, scholarships, supplementary learning centers (ITC), vocational training for employability (Tata Power, Wipro).
• Healthcare: Medical camps, hospital infrastructure, COVID-19 relief (oxygen, PPE), sanitation, HIV/AIDS awareness (Wipro, HUL).
• Environmental Sustainability: Afforestation (BHEL), water conservation, renewable energy, waste management (Infosys, HUL, BHEL).
• Rural & Community Development: Slum development, disaster relief, women’s empowerment via Self-Help Groups (Tata Power, Reliance).
• Poverty Eradication: Hunger reduction programs, supporting livelihoods for marginalized groups. 

Examples by Company: –

• ITC: Focuses on education (Supplementary Learning Centres) and sustainable agriculture.
• Tata Power: Empowers women in Kutch through SHGs, providing financial aid.
• Infosys: Water body restoration, metro station partnerships, general education.
• Wipro: Health, wellness, disaster relief, and education through Wipro Care.
• BHEL: Large-scale afforestation and biodegradable product support. 

Trends & Mandates: –

• Legal Framework: Mandated by the Companies Act, 2013, requiring companies to spend a percentage of profits on CSR.
• Sectoral Shifts: Increased spending on environmental sustainability, growing focus on skill development and technology for impact measurement.
• COVID-19 Impact: Significant CSR funds directed towards creating health infrastructure and supplying medical equipment during the pandemic. 

In India, Corporate Social Responsibility (CSR) is crucial for the corporate sector as it enhances brand image, boosts customer loyalty, attracts/retains top talent, mitigates risks, and drives long-term financial sustainability by aligning business goals with societal welfare, fulfilling legal mandates, and creating shared value in a conscious marketplace. 

Key Importance for Corporations:-

• Enhanced Reputation & Brand Value: CSR builds a positive public image, increases brand recognition, and differentiates companies in competitive markets, fostering trust among consumers, investors, and the media.
• Customer Loyalty & Sales: Consumers prefer and trust brands that contribute positively to society, leading to deeper connections, increased loyalty, and higher sales.
• Talent Attraction & Retention: Socially conscious companies attract skilled professionals who seek purpose-driven work, improving morale, engagement, and retention.
• Risk Management: Proactive CSR helps mitigate legal, regulatory, and reputational risks by addressing social and environmental concerns, preventing lawsuits and negative publicity.
• Long-Term Sustainability: By investing in community and environmental well-being, businesses build sustainable models that benefit society and ensure their own longevity.
• Access to Capital & New Opportunities: Strong CSR can attract investors and create partnerships with NGOs and communities, opening new markets and growth avenues.
• Legal Compliance: In India, CSR is mandated by law (Section 135 of the Companies Act, 2013), making it a necessity for compliance, especially for large companies. 

Societal Impact & Business Synergy

• Poverty Alleviation & Education: CSR initiatives contribute to grassroots development, education, and poverty reduction, benefiting society directly.
• Community Development: Engaging with local communities through CSR fosters better stakeholder relations and promotes inclusive economic growth. 

In essence, CSR moves beyond charity to become a strategic imperative, benefiting both the corporate sector’s bottom line and India’s overall sustainable development. 

Key trends: –

1. Slower CSR spending growth: In FY 2023-24, the CSR spending by companies listed on the National Stock Exchange (NSE) increased by 5 percent to INR 155.24 billion, up from INR 148.16 billion in FY 2022-23. This growth was slower compared to a 13 percent rise in average net profit over the preceding three years.
2. Decline in CSR as a percentage of net profit: CSR spending as a percentage of net profit fell to 1.87 percent, a six-year low, indicating a lag in CSR spending relative to profit growth.
3. Compliance with CSR mandate: Despite the slowdown, 1,271 out of 1,296 companies required to spend on CSR did so, showing an improvement from the previous year.

CSR Expenditure in India
Fiscal year	Total number of companies	Total amount of CSR spent (INR)	States and Union Territories covered	Total number of CSR projects	Development sectors
FY 2023-24	24,392	299.86 billion	40	51,966	14
FY 2022-23	19,888	265.79 billion	40	44,425	14
FY 2021-22	20,840	262.10 billion	39	39,324	14
FY 2020-21	22,985	249.65 billion	38	35,290	14
FY 2019-20	25,181	202.17 billion	39	32,071	14

Source: CSR National Portal, Ministry of Corporate Affairs

Corporate social responsibility (CSR) initiatives involve companies integrating social and environmental concerns into their business operations and interactions with stakeholders. These efforts fall generally into four main categories: environmental, ethical, philanthropic, and economic responsibility. 

Types of CSR Examples

• Environmental Responsibility: Focuses on behaving in an environmentally friendly way, often called environmental stewardship.
  • Examples: Reducing carbon footprints, minimizing packaging, increasing reliance on renewable energy, improving water efficiency, and donating to environmental causes.
• Ethical Responsibility: Ensures an organization operates in a fair and ethical manner through fair treatment of all stakeholders

.     Examples: Offering competitive salaries and compensation, providing generous benefits like parental leave, establishing clear ethical codes of conduct, and ensuring the supply chain avoids child or forced labor.

• Philanthropic Responsibility: Aims to actively make the world a better place through charitable donations and community involvement.
  • Examples: Donating a percentage of profits to charities, organizing employee volunteer programs (with paid leave or volunteer grants), funding scholarships, and providing in-kind donations of products or services.
• Economic Responsibility: Involves making responsible financial decisions that “pay dues” to society.
  • Examples: Paying fair taxes, ensuring financial transparency, paying employees competitive wages, and investing in local communities or businesses that further social good. 

Real-World Company Examples

Many companies have strong CSR programs, often aligning their initiatives with their core business values. 

• Google: Committed to achieving net-zero emissions across all operations by 2030, powered entirely by carbon-free energy. It has invested billions in renewable energy projects and offers Google Ad Grants, providing free advertising credits to eligible nonprofits.
• Microsoft: Known for its robust employee volunteering programs and its donation of billions in tech assets and grants to nonprofits worldwide.
• Starbucks: The Coffee and Farmer Equity (C.A.F.E.) Practices program sets guidelines for ethically sourcing 100% of its coffee to ensure sustainability and fair working conditions for farmers.
• Walmart: Focuses on large-scale philanthropy, donating over a billion dollars in cash and in-kind goods annually, and works with suppliers to reduce their emissions.
• TOMS: A Certified B Corporation that donates a portion of its profits to support various causes like mental health, access to opportunities, and ending gun violence (previously known for its “One for One” shoe donation model).
• Patagonia: Commits to radical supply chain transparency and environmental activism, donating 1% of all sales to conservation efforts and using organic cotton.
• Coca-Cola: Aims to make 100% of its packaging recyclable by 2025 and has a goal to return 100% of the water used in its beverages back to communities and nature. 

Example: ITC Limited

Key aspects of ITC’s CSR approach include participatory planning and community ownership, emphasizing behavioral change and asset creation. The Two Horizon approach guided ITC’s Social Investments Program, promoting inclusive growth and livelihood enhancement.

ITC’s CSR projects spanned 27 States/Union Territories and impacted over 300 districts. Notable initiatives included:

• Social forestry: Afforested over 31,000 acres, benefiting 176,000 households.
• Water stewardship: Enhanced water security across 136,000 acres with effective water-harvesting structures.
• Biodiversity conservation: Revived ecosystems over 150,000 acres, improving biodiversity.
• Climate smart agriculture: Covered 2.34 million acres, promoting sustainable farming practices.
• Livestock development: Improved livelihoods for families engaged in various livestock rearing.
• Women empowerment: Supported over 35,400 women and reached 210,000 self-help groups.
• Education: Enhanced learning for over 250,000 children.
• Skilling & vocational training: Trained over 14,400 youth, achieving a 68 percent placement rate.
• Sanitation: Constructed toilets benefiting 115,000 community members.
• Health & nutrition: Improved health awareness for over 560,000 beneficiaries.
• Waste management: Developed models for zero waste to landfills.
• ITC Sangeet Research Academy: Promoted Hindustani Classical Music through training.

Example: Tata Chemicals

In the fiscal year 2022-23, Tata Chemicals allocated INR 160 million to CSR initiatives. During FY23, Tata Chemicals collaborated with 5,245 farmers, providing training and support in areas like livestock management and organic farming, which improved farm productivity and farmers’ incomes.

The company also engages rural youth through skill development programs in areas such as fashion technology and welding, creating employment and entrepreneurial opportunities. These initiatives take place at various locations, including a skill development center in Mithapur and partner institutions like Tata Strive Skill Development Centre.

The company has established comprehensive CSR policies, including a Community Development Policy and Diversity & Inclusion Policy.

In 2024, Corporate Social Responsibility (CSR) in India became crucial for enhancing brand image, attracting talent, ensuring long-term profitability, and meeting legal mandates under the Companies Act, with spending by listed firms rising 16% to ₹17,967 crore, driving community development in education, healthcare, and environment while boosting inclusive growth and aligning with national goals like “Developed India 2047,” though financial limits and awareness remain hurdles. 

Importance of CSR for the Corporate Sector in India (2024)

• Enhanced Brand & Reputation: CSR builds trust, positive public image, and brand equity, attracting ethically-conscious consumers.
• Talent Attraction & Retention: Employees, especially younger generations, prefer socially responsible employers, boosting morale and loyalty.
• Long-Term Profitability: Socially responsible practices are linked to business expansion, stability, and increased profitability.
• Legal Compliance & Governance: India’s Companies Act, 2013, mandates CSR for large firms, making it a core governance requirement, not just voluntary.
• Community & National Development: CSR supplements government efforts in education, healthcare, poverty alleviation, and sustainable development, aiding India’s vision for 2047. 

Key Data & Trends (FY 2023-24)

• Increased Spending: Total CSR spending by listed companies grew 16% to ₹17,967 crore in FY24.
• Mandatory Thresholds: Companies with ₹500 Cr+ net worth, ₹1000 Cr+ turnover, or ₹5 Cr+ net profit must comply.
• Key Focus Areas: Education, skill development, healthcare, and environmental sustainability saw significant investment.
• Collaborative Approach: Increased partnerships between companies, NGOs, and government to maximize impact. 

Tabular Data: CSR Impact & Trends

Metric/Area	Data/Trend (Approx. 2024)	Significance for Corporates
CSR Spending Growth	16% increase in FY24.	Shows growing commitment & integration into business.
Total CSR Spend	₹17,967 Crore (Listed Cos, FY24).	Demonstrates scale of corporate contribution to society.
Profitability Link	Positive correlation (r=0.67) between CSR & business expansion.	Proves CSR as a strategic financial advantage, not just cost.
Employee Engagement	Higher morale & attraction for values-driven employees.	Crucial for talent management in a competitive market.
Community Well-being	15% rise reported via MSME CSR.	Shows tangible social return on investment (SROI).
Environmental Impact	20% drop in carbon emissions with green tech adoption.	Aligns with ESG goals & regulatory demands.
National Vision	59% of MSMEs ready to expand CSR for national goals.	Positions companies as key partners in nation-building.

Data reflects trends and reported figures from 2024 sources; MSME data from a 2025 study on 2024 trends. 

Conclusion

The outcome of this paper demonstrates that governments should play a proactive role in promoting CSR in any given nation or state, as Caroll (1991) argues that CSR is “an economic, legal, ethical, and discretionary expectation (philanthropic).” The same sentiment is expressed by Freeman (1984), who argues that business has responsibilities for groups and individuals who can both influence and be influenced by business operations. Hopkins (2003) also acknowledged that CSR has four core principles or addenda of economic, legal, ethical, and discretionary expectation (philanthropic) that should not be left only to the corporation’s voluntary means but should be safeguarded and managed so that there is a win–win situation between a corporation and the communities or societies they operate. In some developing countries in Africa, CSR activities are inexistence not implemented, or the elites are the ones who benefit from such funds that could help spur development in those countries. CSR’s best practices should be transferred from developed west to developing countries since most of these corporations operating in developing countries are businesses with origins in the western world, for example, firms operating in mining or forestry products or communication.

Collaboration is vital so that CSR core issues are shared. There is a need for a transfer of best practices of CSR. In promoting CSR activities or agendas, each country or government should carefully consider its own social, economic, cultural, political, and growth situations. Hence, good governance is essential for CSR activities, especially in developing countries where centralization leads to inefficiencies and ineffectiveness. There is a need to avoid situations whereby some oil companies and forestry exploration corporations in developing countries in Africa do not directly benefit their local communities.

Most local communities in developing countries feel abandoned by corporations exploring their natural resources. There is a growing sentiment of anti-western domination, notably when some of these western companies are operating in developing countries and are not implementing CSR activities or are benefiting a small elite in developing countries. Good governance and transparency in the management of natural resources in developing countries concerning CSR agenda are welcome, and best practices should be shared and not kept as a policy that is not used or communicated. The need for local chiefs in developing countries and the local authorities to be transparent in managing local land and its natural resources for local development and growth is essential hence the CSR agenda. Thus, the significant contribution of this paper is that governments should play a proactive role in promoting CSR activities that benefit local communities and their societies. Developing countries’ nature government systems need to be transparent and serve the interest of their people. We need to avoid a situation whereby rich oil countries with significant natural resources do not benefit those at the local level but rather tiny elites who have confiscated the country’s natural resources for themselves only and their families. Developing countries’ governments can use varied instruments in promoting CSR by creating awareness, fostering and partnering, mandating, volunteering, or putting soft legislation in place for corporations to further improve CSR activities that benefit communities at large. Soft legislation will enable some of these corporations to comply with their CSR initiatives. For example, tax exemptions for a business that contributes money to educational, environmental, and social issues are vital for developing countries instead of CSR activities as philanthropic only. CSR should not be seen only as a philanthropic agenda but rather should focus on social, economic, environmental, and legal to spur economic growth and development for developing countries, especially in Africa.

The literature shows that many countries in the west and some developing countries profit from CSR activities and, more importantly, during the COVID-19 pandemic. The result also shows that developing countries should not blindly be copying from western countries’ CSR agendas. They should create CSR agendas that reflect their realities. Developing countries in the south should learn from developed countries’ CSR implementation, for example, the United Kingdom, the USA, Sweden, Denmark, South Korea, Malaysia, Singapore, Saudi Arabia, and India. There should not be a blind adoption of the implementation of the CSR agenda from the north; government and governance must create their own CSR agenda that fit them and their communities’ realities and context. This study contributes to CSR issues in developed countries, including how developing countries can learn from good practices in the developed world to strengthen CSR in developing countries, as well as the role of government in promoting CSR agendas for development and growth rather than seeing CSR as philanthropy. Good collaboration between developed and developing countries in enhancing best practices of CSR is vital because corporations have responsibilities to society that go beyond economic, legal, and moral expectations. Future research is needed to examine CSR agendas in both developed and developing countries and not allow CSR activities to be only a voluntary act by corporations.

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