Corporate Social Responsibility In India: Legal Framework And Emerging Challenges
- IJLLR Journal
- 1 day ago
- 2 min read
Jyoti Sharma, Assistant Professor of Law, Parul University.
ABSTRACT
Corporate Social Responsibility (CSR) in India has undergone a significant transformation from a largely voluntary form of corporate philanthropy into a statutory responsibility governed by a detailed legal and regulatory framework. The Companies Act, 2013, particularly Section 135 and Schedule VII, established the principal legal foundation for mandatory CSR by requiring companies satisfying prescribed financial thresholds to undertake specified social-development activities and to spend at least two per cent of their average net profits in accordance with the statutory framework. The Companies (Corporate Social Responsibility Policy) Rules, 2014 further developed the institutional and procedural aspects of CSR, including CSR policy, implementation, reporting, monitoring and impact assessment. The development of the legal framework has been accompanied by several amendments and regulatory initiatives intended to improve transparency, accountability and effectiveness. The Companies (Corporate Social Responsibility Policy) Amendment Rules, 2021 and 2022 introduced important changes concerning CSR implementation, impact assessment, reporting and compliance. Alongside the CSR framework, the Securities and Exchange Board of India (SEBI) has developed the Business Responsibility and Sustainability Reporting (BRSR) framework, followed by BRSR Core and value-chain disclosures, thereby expanding the regulatory emphasis on environmental, social and governance performance. Despite these developments, the effectiveness of CSR cannot be measured only by the amount of money spent. The implementation of CSR continues to face challenges relating to compliance- oriented approaches, impact measurement, monitoring, transparency, implementing agencies, internal corporate capacity, regional disparities and coordination with government programmes. The central challenge is therefore to move CSR from a narrow expenditure-based model towards meaningful and measurable social impact. This article examines the evolution, legislative framework, recent regulatory developments and emerging challenges of CSR in India and argues that the future effectiveness of the framework depends upon stronger implementation, credible impact assessment, stakeholder participation and greater accountability.
Keywords: Corporate Social Responsibility, Section 135, Companies Act, 2013, Schedule VII, CSR Rules, Corporate Governance, BRSR, ESG, Social Impact.
