Corporate Social Responsibility in India: An Obligation or Manipulation?

Corporate Social Responsibility abbreviated as CSR, is the company’s way of giving back to the society. Corporate Social Responsibility (CSR) is specified under Section 135 of the Companies Act, 2013. This framework was introduced so that companies also focus on societal welfare and sustainable development and do not function solely with profit making motive. India’s mandatory CSR framework was envisioned as a progressive mechanism to strengthen ethical corporate governance and public welfare. In the corporate arena, even though majority of businesses comply with CSR mandates, there are certain entities that indulge in unethical practices whereby they transcend the noble objectives that are outlined under the Seventh Schedule of the Companies Act, 2013. There are situations where obligation turns into pure compliance activity. This paper aims to critically examine the effectiveness of Corporate Social Responsibility (CSR) as mandated under the Companies Act, 2013. Through a doctrinal analysis, it aims to analyse the effectiveness of the framework in achieving its intended objectives of social welfare and sustainable development. The paper also examines the possible loopholes that can be misused by companies through the means of CSR and the effects of the same in cases of tax evasion.