The corporate is an enterprise whose main object is to earn profit. It is expected from corporate to earn profit to meet its obligations to different categories of stake-holders. The stake-holders may be individuals or organizations, on which the corporate is having impact in some form. It may be considered as description of entity of corporate. But in the context of social responsibility, performance of the corporate towards the stake-holders welfare is expected.

Corporate Social Responsibility (CSR) is the responsibility of the corporate entity towards the society in consideration of the support given and sacrifices made by the society. The corporations exploit the natural resources of the country, cause incidental damage to environment and inconvenience to the people of the project area. Therefore, they have a responsibility towards the society to share a part of their profit.

The Corporate Social Responsibility concept was introduced in India in 2013. The new concept of Corporate Social Responsibility was introduced under section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility) rules, 2014. India was the first country in the world, who introduced statutory Corporate Social Responsibility (CSR) through the new Companies Act, 2013. It is now (2019-20) four years of implementation of CSR and New Companies Act 2013, so this paper is an attempt to review performance of social responsibility of corporate towards the stakeholders.

Corporate Social Responsibility (CSR):

Corporate Social Responsibility can be defined as "Pragmatic responsiveness of business to stake-holders, consumers and civil society".

World Business Council for Sustainable Development defines Corporate Social Responsibility (CSR) as "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."

Corporate Social Responsibility is a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. It is a way through which a company can maintain balance of economic, environmental and social imperatives. It is a goal oriented concept to encourage a positive impact through its activities on the environment, consumers, employees, community’s stakeholders and all other members of the society. CSR has widely been regarded as a positive concept helping bridge the gap of social inequality and thus contributing to sustainable development.

Background of CSR in India:

The concept of Corporate Social Responsibility was introduced in law in India in 2013. The new concept of Corporate Social Responsibility was introduced under section 135 of the Companies Act, 2013 and Companies (Corporate Social Responsibility) rules, 2014. India was the first country in the world, who introduced statutory Corporate Social Responsibility (CSR) through the new Companies Act, 2013. Prior to this, CSR was not a new concept in India and can be traced with historic pieces of evidence. The concept of CSR has existed in ancient India and our ancient wisdom has framed a platform for CSR. The origin of CSR can be traced from our Upanishads, Puranas and Vedic literature like Ramayana, Mahabharata, and Bhagavad-gita.

Legal Framework of CSR:

History of CSR:

The first attempt by the Central Government of India regarding CSR was the issue of Corporate Social Responsibility Voluntary Guidelines in 2009 by the Ministry of Corporate Affairs (MCA, 2009). The importance of CSR were discussed in the in the Report of the Task Force on Corporate Excellence by the Ministry of Corporate Affairs (MCA, 2000). It is in the Voluntary Guidelines of 2009 that the basic elements of a CSR policy were canvased, included care for all stakeholders, ethical functioning, respect for worker’s rights and welfare, respect for human rights, respect for the environment and activities to promote social and inclusive development. These Guidelines were followed by the National Voluntary Guidelines of Social, Environmental & Economic Responsibilities of Business in 2011. These guidelines had laid down nine principles for businesses to function in a responsible manner to promote inclusive economic growth at the national level. The Securities Exchange Board of India (SEBI) compel the top listed 100 companies (Clause 55 of the Listing Agreement) to disclose their CSR activities in the Business Responsibility Reports (BR Reports) accompanying the Annual Reports. The most significant step at CSR activities for companies came with the enactment of Section 135 of the Companies Act 2013 (MCA, 2013). India`s new Companies Act 2013 (Companies Act) had introduced several new provisions which changed the face of Indian corporate business. One of such new provisions was Corporate Social Responsibility (CSR). Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 (CRS Rules) which were came into effect from 1 April 2014.

In 2015, a High Level Committee on CSR (under the Chairmanship of Mr.Anil Baijal) was constituted to make recommendations on CSR framework. In the same year SEBI also extends BRR (Business Responsibility Report) reporting to top 500 companies by market capitalization. In 2018, the second High Level Committee (HLC-2018) on CSR (under the chairmanship of Mr. Injeti Sriniwas) was constituted to review CSR framework. The committee has submitted it report in the form of suggestions and valuable recommendations in August 2019.

Applicability of CSR:

According to section 135 of the Companies Act, 2013 below mentioned companies shall constitute a corporate social responsibility committee:

1. Having net worth of rupees five hundred crores or more; OR

2. Turnover of rupees one thousand crores or more; OR

3. A net profit of rupees five crores or more;

It is applicable to every company including its holding company, subsidiary company, foreign company including its branch office or project office in India.

HLC-2018 has recommended that, applicability of CSR should be extended to Limited Liability Partnership, Banks registered under Banking Regulation Act 1949, and also similarly placed entities not covered under Companies Act. In case of newly incorporated companies sec-135 shall lie only after they have been in existence for three years.

Activities under CSR:

The CSR activities include eradication of extreme hunger and poverty, promotion of education, promoting gender equality and empowering women, reducing child mortality and improving maternal health, combating human immunodeficiency virus, immune deficiency syndrome, malaria and other diseases, ensuring environmental sustainability, employment enhancing vocational skills, social business projects, contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women and such other matters as may be prescribed. All the companies which satisfy the CSR criteria will have to undertake CSR activities under the new CSR regime. With this India became the first country to include provisions on CSR in Company Law and make CSR expenditure mandatory for corporates

CSR Committee:

As per section 135(1) of the Act, the qualifying company should constitute a committee (CSR Committee) of the Board of Directors (Board) consisting of 3 or more directors, out of which at least one director shall be an Independent Director. The CSR Committee shall formulate and recommend to the Board, a policy which shall indicate the activities to be undertaken (CSR Policy); recommend the amount of expenditure to be incurred on the activities referred and monitor the CSR Policy of the company. The Board shall take into account the recommendations made by the CSR committee and approve the CSR Policy of the company.

HLC-2018 has recommended that companies having prescribed CSR amount below Rs.50 lakhs be exempted from forming a separate CSR Committee, the Board itself will carry out the functions of CSR Committee.

Companies Liable for CSR:

After introduction as a statutory obligation under section 135 of the Companies Act, 2013, CSR became significant activity for the corporates. During the initial period of implementation, the four years were learning experience for all the stakeholders. Following data has been obtained from the reports and filings made by the companies as per the CSR provisions,

Table 1.1

Number of Companies liable for CSR

(As per reporting and filings as on 31^st March 2019)

Sr. No.	Company profile	Year 2014-15	Year 2015-16	Year 2016-17	Year 2017-18
1	Companies liable and reporting on CSR	9418	11671	12407	10868
2	Companies, on whom schedule III of Act us not applicable but reporting on CSR	1000	1284	775	716
A	Total Number of Companies reporting on CSR	10418	12955	13182	11584
3	Companies liable but not reporting on CSR	6130	5335	6350	9753
B (A+3)	Total Number of Companies liable for CSR	16548	18290	19532	21337

Source: compiled from Report of High Level Committee on CSR, 2018.

Table 1.1 indicates the number of companies liable for CSR. Total number of companies liable for CSR includes both, the companies reporting on CSR and not reporting on CSR. These are the companies which were identified for CSR obligation as per mandate of the Act. The total number of companies indicates that the number of liable companies were increased from year 2014-15 to year 2017-18.

CSR Expenditure by Companies:

As per to section 135 of the Companies Act, 2013 the liable companies are required to spent 2 percent of their average net profit of the preceding three years on CSR. The companies must disclose CSR related details in Director’s Report.

Table 1.2

CSR Expenditure by Companies

(As per filings received on 31^st March 2019)

Year of fillings	2014-15		2015-16		2016-17		2017-18
Year of fillings	No. of companies	Total CSR expenditure (in Rs.cr.)	No. of companies	Total CSR expenditure (in Rs.cr.)	No. of companies	Total CSR expenditure (in Rs.cr.)	No. of companies	Total CSR expenditure (in Rs.cr.)
NON PSU	10083	7249.11	12551	10302.39	12810	11026.63	11314	10787.50
Average spent by NON PSU	0.72		0.82		0.86		0.95
PSU	335	2816.82	404	4201.26	372	3285.40	270	2539.19
Average spent by PSU	8.40		10.40		8.83		9.40
Grand Total	10418	10065.93	12955	14503.65	13182	14312.03	11584	13326.69

Source: compiled from Report of High Level Committee on CSR, 2018.

Table 1.2 indicates the total expenditure by the companies from 2014-15 to 2017-18. The data is compiled from the filings reported by the companies. It is observed that the CSR expenditure has been increased by 44 percent from 2014-15 to 2015-16 and thereafter decreased marginally in 2016-17 and in 2017-18. The number of reporting companies increased from 2014-15 to 2016-17. The average amount spend by a private sector company has continuously increased from 2014-15 to 2017-18, i.e. from Rs.72 lakhs to Rs. 95 lakhs respectively. The average amount spend by a govt. sector company was in between Rs.8-10 crore.

Basic objective of CSR is welfare and up gradation of society. Hence, Corporate should look upon business activity not only as a source of profit, but as a way to upgrade the society, to provide best quality life to society, to return something concrete to society. Companies should put social responsibility objective before profits. Companies should evaluate profit not just in figures but in 'values'. Corporate Social Responsibility activity strengthens the companies in community and also establish strong, fair image of the corporate. In India, CSR was enacted in 2013 and implemented from 2014. After four years of implementation of CSR, it is observed that 21337 companies are liable for CSR and Rs. 13326.69 crore were spent by the companies under CSR in 2017-18. Public sector as well as private sector units are contributing under the CSR provisions.

References:

1. Report of the High Level Committee on Corporate Social Responsibility, Government of India, 2018.

2. Sharma J.D-'Corporate Social Responsibility', the Management Accountant, June 2013.

3. Berad N.R. - ''Corporate Social Responsibility-Issues and Challenges in India', in the proceeding of International Conference on Technology and Business Management, March 28-29, 2011.

4. Gupta R.-' Emerging Trends of 'Corporate Social Responsibility in India.

5. Usha L.-'Corporate Social Responsibility in India –A way to Socio Economic Development ', Indian Journal of Applied Research Vol-2, No-2, 2012.

6. Chitale Amey Satish-' 'Corporate Social Responsibility,Necessity,Not Just Charity',THINK-LINE,issue no-88,30^th Oct,2013.

Websites:

1. http://www.researchgate.net

2. http://www.thecrpractice.wordpress.com

3. http://www.mca.gov.in