Paper on CSR in India

While the Companies Bill, 2011 is still pending in
Parliament, the provision on corporate social responsibility (CSR) spending
continues to be one of the contentious issues. It is not clear what form that
provision will take during the next round of the lawmaking process. The oddity
of the CSR proposal in the Indian context is its mandatory nature, which has
been somewhat diluted in the 2011 Bill to make it quasi-mandatory or “hybrid”
in nature.
Given this situation, a paper titled India’s Mandatory Corporate Social
Responsibility Proposal: Creative Capitalism Meets Creative Regulation in the
Global Market
by Caroline Van Zile looks at the debates in CSR generally,
and also its evolution in the lawmaking process in India. The abstract is as
This Comment traces the legislative, socio-political, and
legal history of a truly unusual and innovative legislative proposal recently
raised in India: mandatory corporate social responsibility (CSR) spending for
all businesses. While many commentators criticized the proposal for falling
outside of the traditional western conception of CSR, this note suggests that
what might seem retrograde or unusual to westernized companies can more
productively be viewed as India’s attempt to navigate a difficult divide,
unique to BRICS countries. India is under intense pressure from its populace to
address growing inequalities and deficiencies in infrastructure; at the same
time, it is facing perpetual international pressure to keep its economy highly
liberalized, with little taxation. The CSR proposal represents the Indian
parliament’s attempt to create a novel policy to serve both goals; such
attempts at innovation, which do not simply import western laws or governance
regimes, should be encouraged.

This adds to the burgeoning academic literature on
CSR in India. See also Directors
as Trustees of the Nation? India’s Corporate Governance and Corporate Social
Responsibility Reform Efforts
by Afra Afsharipour.

About the author

Umakanth Varottil

Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.

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