Corporate Social Responsibility (CSR) or corporate social impact is more than just a buzzword today; it’s a critical part of how businesses function and contribute to society. CSR in India has moved from a voluntary or reputation-building effort to a legally mandated activity, thanks to the Companies Act, 2013. This act marked a revolutionary step in making India the first country in the world to legally mandate CSR spending. Under this law it is legally required for certain companies to spend a minimum 2% of their average net profit over the last three years on CSR activities.
What was once seen as a voluntary activity is now a statutory obligation for companies meeting a specific financial criteria. As today businesses are no longer judged only by profits but also their contribution towards society and the environment. But what is CSR and how does it benefit the company as well as the society as a whole?
What is CSR or Corporate Social Responsibility?
CSR refers to a business approach that contributes to sustainable development under the four main categories mainly environmental, ethical, philanthropic and economic. For example under the environmental category a company can work on CSR initiatives by minimizing pollution, investing in clean and green energy, proper waste management and big brands can develop products that promote sustainability.
The main cause of CSR in India is just not to use the profit for charity, it also benefits companies in many ways. A company can also use this to show their employees that they care for them. On the other hand big brands can use this to improve their image and build trust among consumers.
This will benefit long term commitments and also tend to build stronger relationships in the community as well as get recognized globally. This legal push has significantly raised awareness, accountability, and strategic planning around CSR in India.
One of the examples of this is the Tata group that spends 5 – 7 % of their profits on CSR Initiatives. They make use of philanthropic practices to causes like education, environment, healthcare and development of rural sectors. This includes charity made to organizations like the National Association of the Blind, Indian Red Cross Society, Tribal Cultural Society and more.
India’s Legal Framework: Companies Act, 2013
India is the first nation to implement law of Corporate Social Responsibility. CSR in India gained serious momentum and is growing rapidly due to the Companies Act, 2013, which made CSR spending compulsory for companies that met with the financial criteria.
The Govt. of India allows the Companies operating in India to intervene in a wide range of activities concerning Poverty, Food, Health, Nutrition, Water, Sanitation, Education, Gender, Vulnerable Groups, Environment, Art & Culture, Youth & Sports, Research & Development, Rural Development, Disaster Management etc. to be included in their Corporate Social Responsibility Policies.
Some of the activities listed in the Schedule VII of the Act includes eradicating hunger, promoting education, empowering women, contributions to public-funded Universities, promotion and development of traditional art and handicrafts, promote rural sports, contributions to PM’s Relief Fund and more
Under this companies that have a net worth of Rs. 500 crore or more are eligible under this Act. Along with turnover of Rs. 1,000 crore or more. Lastly the net profit of the company to be Rs. 5 crore or more.
Why CSR Matters for Businesses
CSR In India as well as Indian business is more than focusing on profits. Today consumers prefer if brands do charity and give back to the society. It’s a responsibility that must come to brands willingly. This can help brands build trust, loyalty and connection with customers. For example, if a brand is a clothing brand they can contribute the unused clothes that are thrown for a cause to the roadside children and family that do not have proper shelter and clothing.
Companies that provide benefits to the needy tend to attract and retain employees. As the people working for brands stay in places where companies not only care for employees but also care for the society as a whole. Millennials and Gen Z prefer to work with organizations that have a positive social impact.
Apart from the employees CSR opportunities also bring the community together irrespective of race, religion, caste and gender. This means companies create strong community ties, reduce conflict and be a helping hand to all those in need, more like a goodwill.
Green initiatives or socially responsible business models often lead to more efficient use of resources and innovative solutions. innovative solutions. Many fast food or fast fashion brands too are conscious about the environment and they come up with various CSR initiatives to help take on global issues.
The famous food delivery brand Tomato had now introduced “Climate Conscious Delivery” by encouraging electric vehicle (EV) bikes and plastic-free packaging for food orders. Similarly well-known fashion brand Levis encourages its costumers through its “Buy Better, Wear Longer” campaign to raise awareness about sustainable fashion and encourage conscious consumerism. The brand promotes the idea of investing in durable, high-quality clothing that lasts longer, reducing the cycle of fast fashion.
CSR in India By Top Indian Companies
1. Tata Group– Tata Sons is known for its legacy of philanthropy. It invests heavily in education (Tata Trusts), healthcare, and rural development. Initiatives like Tata Water Mission and Tata STRIVE (skill development) are highly impactful.
2. Reliance Industries – Reliance Foundation works in rural transformation, health, education, and disaster response. Its Project Drishti helps restore vision for underprivileged people, while Reliance Foundation Digital Learning boosts rural education.
3. Infosys – The Infosys Foundation, led by Sudha Murthy, is one of the most recognized CSR entities in India. It supports projects in education, rural development, arts and culture, and healthcare.
4. Wipro – Wipro invests in education reform (Wipro Applying Thought in Schools), environmental sustainability, and disaster relief. Its initiatives focus on long-term impact rather than short-term gains.
5. ITC – ITC’s CSR model is integrated into its business. Projects like e-Choupal (farmer empowerment) and Social and Farm Forestry Initiatives have transformed rural livelihoods.
Notable CSR Projects in India
- Hindustan Unilever’s Project Shakti: Empowers rural women to become direct-to-home sales representatives of Unilever products.
- Mahindra’s Nanhi Kali: Provides education to underprivileged girls across India.
- Maruti Suzuki’s Driving Schools: Increases road safety awareness and provides driving training to thousands across India.
- Vedanta’s Nand Ghar Project: Aims to transform anganwadis into modern child care centers across rural India.
- JSW Foundation: Works across water conservation, sanitation, skill development, and heritage conservation.
Challenges in CSR Implementation
Despite growing awareness and legal backing, implementing CSR in India comes with its own set of challenges. Some of the common challenges are as follows:
- Lack of proper impact metrics
- Tokenism or superficial projects
- Inadequate monitoring or evaluation
- Mismatch between business goals and CSR objectives
- Administrative and Bureaucratic Hurdles
- Lack of Awareness or Expertise
- Funding Limitations during economic downturn
- CSR programs designed without input from local communities
CSR is no longer seen as charity or a compliance task. Today, companies align CSR with their core business strategy. For example:
- A food company may focus on hunger alleviation
- A tech company may invest in digital literacy
- A manufacturing firm may focus on green energy or waste reduction
CSR also opens new markets by enabling companies to work at the grassroots level, understand emerging customer needs, and tailor solutions that are both impactful and profitable.
India’s approach to Corporate Social Responsibility is a global case study in how legislation can drive social change. Thus as awareness grows, so does the expectation that businesses must act not just in the interest of shareholders, but also for the broader good of society. In the long run, companies that invest in CSR are not just giving back—they are building resilient, sustainable, and respected brands for the future.
