Economics of Corporate Social Responsibility in India: A Review of the Social Development Expenditure

Abstract

Corporate Social Responsibility (CSR) is a programme to achieve win-win situation to the nation’s state and corporate world of any country, including India. All such states have created necessary environment for better functioning of the corporate undertakings and in turn, the latter is expected to shoulder the responsibility of social development of the society. India is the only country to put up CSR Act with mandatory clauses enacted from 2013 and endowed the necessary freedom to the corporate world. The act has completed a decade of its applicability in the entire country. This paper capture the expenditure trend of the CSR contributions of the corporate world and analyses the pattern of social development of the country. It is done with the help of the secondary data maintained by the Ministry of Corporate Affairs (MCA), Government of India. The CSR investment has taken place substantially across three different sectors, including the social development segment. Within the social sector, education development and health care activities have accounted to large majority of the social investment for various reasons. The CSR investment has also taken place to promote economic activities, besides transferring some portion to the dedicated account of the national government on a very limited scale. State wise analysis of the CSR investment is also captured in order to present the regional perspective. Besides discussing the issues associated with the sectoral investments, the paper highlights growing indication of crony capitalism, lack of serious investment concerns over the real issues, high order of regional imbalances in the investment etc. With this backdrop, the paper offered a few policy implications, to ensure effective and conspicuous social development in the country.