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TopEvolution Of Csr In India
The word CSR might be comparatively fresh to India, but the notion days back to history of Mauryan where philosophers such as Kautilya stressed upon moral practices and ideologies while performing commercial activities. CSR has been informally experienced in early periods in form of offerings to the underprivileged and deprived. India has an innate ethos of sharing and caring.
Therefore, it can be observed that religion also has a key part in endorsing the idea of CSR. Traders belonging to Hindu religion used to give charities, temples and night accommodations for the poorer people. Hindus trailed Dharmada where the producer or vendor charged a precise amount from the buyer, which was used for charity. Now, we can comprehend that the history of CSR in India goes equivalent to the historical development of India. The history of CSR in India can be generally separated into five phases.
The first segment of CSR was driven by moral actions of humanitarians and charity. These values were influenced by family values, traditions, culture and religion along with industrialization. Until 1850, the wealthy business persons pooled their resources with the humanity in the form of establishing temples or spiritual institutes. The attitude towards CSR altered with the entrance of colonial rule in 1850. In the Pre-independence era, the pioneers or spreaders of industrial development also reinforced the idea of CSR. In 1900s, the entrepreneur such as Tatas, Birlas, Modis, Godrej, Bajajs and Singhanias endorsed this notion by establishing charitable foundations, educational and healthcare institutes etc.
The second segment was the time of independence fight when the entrepreneurs were forced to demonstrate their devotion for the welfare of the society. Mahatma Gandhi gave the concept of trusteeship. Trusteeship assisted in the socio-economic growth of India.
In the third segment from 1960-1980 there was the period when Public sector undertakings were growing and there was a density to safeguard the proper distribution of wealth. The rule of industrial licensing, great taxes and limitations on the private sector caused in corporate misconducts. This led to enactment of legislature concerning corporate governance, labor and environmental issues. Still public sector undertaking were not very fruitful. Thus, there was a natural move of anticipation from the public to the private sector and their active involvement in the socio-economic growth.
In the fourth segment, i.e. from 1980-2013, Indian corporations combined CSR into a sustainable corporate policy. With globalization and monetary liberalization in 1990s, there was an enlarged impetus in industrial development, making it probable for the businesses to donate more for social welfare of society.
In the present situation in India the fifth segment is as per new Company Law, 2013 wherein companies have to contribute 2% of their average net profits of preceding 3 years towards CSR which made Indian companies to intentionally work towards CSR, since it is necessary for a prescribed class of corporations whose net profit is rupees. 5 crore or net worth is 500 crore or turnover is 1000 crore. The new act replaces the Companies act 1956 and emphasizes carrying forward the agenda of CSR.