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Mandated Corporate Social Responsibility (mCSR): Implications in Context of Legislation

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International Business Strategy

Abstract

Worldwide, governments are attempting a unique combination of hard and soft legislation aimed at getting business to share responsibility for providing and sustaining a welfare state. The discretionary responsibility of philanthropy is increasingly coming under mandate; we label this as mandated CSR (mCSR). The concept of mCSR is discussed in the present chapter, using experiences from Indian legislation. In 2013, India legislated that large-sized companies must spend two percent of their net profit on priority issues such as poverty alleviation, capacity building, and environmental sustainability. This study discusses various problems and implications that are likely to be inherent in mCSR, using the Indian legislation as a backdrop.

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Notes

  1. 1.

    http://indiacode.nic.in/acts-in-pdf/182013.pdf, accessed on 28th February 2014.

  2. 2.

    One USD = 62 Rupees on 28th February 2014.

  3. 3.

    One crore = 10 million.

  4. 4.

    http://articles.economictimes.indiatimes.com/2013-08-13/news/41374893_1_sirohi-india-inc-social-sector/2, accessed on 28th February 2014.

  5. 5.

    http://www.tata.com/company/profile/Tata-Sons, accessed on 28th February 2014.

  6. 6.

    The Corporate Social Responsibility Rules under Section 135 of the Companies Act, 2013, was notified on 28th February, 2014, and comes into effect from 1st April 2014. The financial year in India is from 1st April to 31st March.

  7. 7.

    Waagstein (2011) has dealt with these three questions while discussing mandatory CSR in context of Indonesia. However, the legislation is restricted to only those companies which deal in natural resources (definition is open-ended), quantum of obligatory spending is not defined and cost of CSR can be considered as a corporate cost.

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Author information

Authors and Affiliations

  1. Indian Institute of Management Indore, Indore, India

    Kajari Mukherjee

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  1. Kajari Mukherjee
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Correspondence to Kajari Mukherjee .

Editor information

Editors and Affiliations

  1. Indian Institute of Management Bangalore, Bangalore, India

    S. Raghunath

  2. University of Otago, Dunedin, New Zealand

    Elizabeth L. Rose

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Mukherjee, K. (2017). Mandated Corporate Social Responsibility (mCSR): Implications in Context of Legislation. In: Raghunath, S., Rose, E. (eds) International Business Strategy. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-54468-1_19

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