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VOL. 7, ISSUE 2 (2025)
Corporate social responsibility in India: legal framework and contemporary implications
Authors
Ish Kumar
Abstract
Corporate Social Responsibility in India has experienced a notable
change, moving from a voluntary charitable activity to a legally required
responsibility under the Companies Act, 2013. This law requires
eligible companies to spend at least 2% of their average net profits on social
and environmental causes, which are clearly listed in Schedule VII of
the Act. The development of CSR in India connects traditional values of
trusteeship with modern business governance, making companies key contributors
to social progress. When comparing internationally, India’s mandatory CSR
spending stands out against the mostly voluntary systems in countries like the United
States, United Kingdom, and European Union, though it shares certain
governance and reporting features with nations such as South Africa and China.
The advantages of CSR in India include social improvement, environmental
protection and greater corporate responsibility, but challenges like unequal
fund allocation, weak transparency, and limited cooperation among stakeholders
affect its full potential. Courts in India have played an important role in shaping
CSR by ensuring that companies do not treat it as a mere formality, but as a
serious duty. This is seen in key cases such as Vedanta Resources plc v.
Lungowe and Sterlite Industries (India) Ltd. v. Union of India,
which stressed honest and transparent CSR efforts. Recommendations from
judicial and regulatory experiences include the need for companies to fully
include CSR in their business strategies, increase transparency, engage
communities closely, improve collaboration with non-profits and government,
train board members and committees effectively, and create better tax
incentives to encourage CSR beyond the legal minimum. With joint efforts from
businesses, regulators, and society, CSR in India can evolve from just meeting
legal rules to becoming a powerful force for fair economic growth. The law and
courts give a strong base, but ongoing improvements in how CSR programmes
measured are necessary. The goal is for CSR to balance profit with purpose,
ensuring business growth helps society and the environment in a sustainable
way.
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Pages:186-191
How to cite this article:
Ish Kumar "Corporate social responsibility in India: legal framework and contemporary implications". International Journal of Law, Policy and Social Review, Vol 7, Issue 2, 2025, Pages 186-191
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