Introduction
Corporate Social Responsibility (CSR) in India mandates large companies to spend 2% of their average net profits on social and developmental activities. While CSR has improved corporate participation in nation-building, rising ecological degradation and deepening socio-economic challenges raise concerns about whether CSR alone can fulfil the ethical and social obligations of the corporate sector.
1. CSR Has Been Efficient in Certain Areas
a) Mobilising significant resources for development
CSR mobilises thousands of crores annually for social upliftment.
Example: In recent years, CSR expenditure has crossed ₹25,000 crore annually, supporting health, education and rural development projects.
b) Strengthening public infrastructure
Companies have supported hospitals, schools, sanitation and digital initiatives.
Example: Infosys, TCS and others have built digital education platforms used by millions of students.
Example: During COVID-19, corporate CSR funds supported vaccination drives, oxygen supply and field hospitals.
c) Promoting environmental initiatives
Many corporates invest in tree plantation, renewable energy and waste management under CSR.
Example: Tata Power has expanded its renewable portfolio while supporting local biodiversity projects through CSR initiatives.
2. But CSR Is Not Sufficient to Address Environmental & Social Harm
a) CSR is often tokenistic compared to the scale of harm
The ecological damage caused by core business operations can far exceed CSR benefits.
Example: Large mining projects causing deforestation and pollution cannot be offset merely by CSR-sponsored plantation drives.
b) CSR spending comes after profits; harm occurs during operations
There is a mismatch between ongoing environmental harm and limited post-profit CSR attempts to repair it.
Example: Industrial effluents, air pollution, groundwater depletion and high carbon emissions cannot be adequately corrected by small CSR budgets.
c) Many CSR projects are branding-oriented, not transformational
Some companies use CSR mainly for visibility and reputation rather than deep social impact.
Example: Short-term events, publicity campaigns or logo-heavy projects often get preference over long-term community development.
d) Weak monitoring and evaluation reduce CSR effectiveness
Lack of robust impact assessment and transparency limits CSR outcomes.
Example: Parliamentary committee reviews have noted that many companies do not fully utilise mandated CSR funds or divert them into activities indirectly benefiting the company.
3. What More Is Needed Beyond CSR?
- Stronger ESG (Environmental, Social, Governance) compliance to embed sustainability into core business operations rather than treating it as an add-on.
- Stricter environmental regulations, green taxation and carbon pricing to discourage harmful practices.
- Ethical corporate governance that prioritises long-term sustainability over short-term profits.
- Greening of supply chains so that sustainability is integrated across procurement, production and distribution, not only in CSR projects.
Conclusion
CSR has played a constructive role in social development and environmental awareness in India, but it is neither fully efficient nor sufficient to counter the large-scale ecological and social impacts of modern corporate activity. True responsibility requires moving from charity-like, post-profit CSR to sustainable, ethical and environmentally responsible business practices embedded within core operations. Only then can the corporate sector meaningfully fulfil its wider social obligations.