Latest Amendments Under CSR Rules and How

Does It Helped Pandemic Situation.

1
 Chapter 1:
Introduction and Conceptual Framework

The problem statement, study objectives, and hypotheses are presented in this
chapter. In order to achieve the goals, it also offers a thorough description of the data
gathering techniques, variables, model design, and statistical tools and procedures. In
order to guarantee the validity and trustworthiness of the data, qualitative research
techniques have been employed to acquire the data.

The chapter also includes the part of literature review in this particular research field.
This includes earlier research pertaining to theoretical background on Recent CSR
Rule Amendments and How They Helped the Pandemic Situation CSR is increasingly
becoming a crucial tool for advancing development. Many businesses have tried to
create a framework for CSR initiatives. The chapter has been divided into major parts
to understand the literature behind the research.

Chapter 1.1: Meaning of CSR:

In order to make sure that its activities are moral and beneficial to society,
corporations can utilise CSR to include environmental, social, and human
development factors into their planning and actions. CSR has historically been seen in
India as a charitable activity. India was the first nation to make CSR mandatory for
some corporations with the insertion of Section 135 to the Companies Act of 2013.
For the current fiscal year, any firm that complies with Section 135 of the Companies
Act, 2013 (the "Act") shall devote at least 2% of its average net income over the
preceding three financial years to ‘Corporate Social Responsibility’ (CSR). Despite
the fact that CSR costs are "philanthropic" in character and not "wholly and
exclusively" corporate expenses, Parliament ruled they would not be qualified for a
deduction under section 37 of the Income Tax Act.

2
CSR refers to the activities that a corporation does in order to fulfil the statutory
responsibility outlined in Section 135 of the Act and the Rules, but excludes the
following:

 The activities that have been done in the normal course of business. However, in
the ordinary course of business, a company engaged in the development and
research of new drugs, vaccines, and medical devices can develop and research a
new drug, vaccine, or medical device relating to COVID-19 for the fiscal years
2020-21, 2021-22, and 2022-23, provided that:
a) The corporation collaborates with any of the organisations or institutes listed
in Schedule VII item (xi) of the Act.
b) The circumstances of the action are disclosed separately in the corporation's
annual CSR report, which is included in the Board of Directors' report
('Board').
 Except for the training of athletes who would represent India in national and
international tournaments, all activities are carried out outside of India.
 Any amount that has been contributed to a political party under Section 182 of the
Act.
 Activities listed in Section 2(k) of the 2019 Wage Code that benefit the company's
employees.
 Sponsored activities are those that a company backs in order to get exposure for
its services or products.
 These activities also fulfil other statutory criteria under any law in force in India.

Companies must make certain that none of these activities are included in their CSR
policies, as they are clearly excluded from the definition of "CSR." CSR credit will
not be given for any costs incurred as a result of these activities.

Illustration:

1. Starbucks has a longstanding reputation for having a strong sense of CSR and
dedication to the environment and community welfare. Since it first began,
Starbucks, according to the corporation, has accomplished many of its CSR goals.
These milestones, according to its 2020 Global Social Impact Report, include

3
 obtaining 100 percent of its coffee from ethical sources, establishing a global
network of farmers and giving them 100 million trees by 2025, establishing green
building practises throughout its stores, giving millions of hours of volunteer
work, and developing a ground-breaking college programme for its staff.1
2. Starbucks intends to hire 10,000 refugees and 5,000 veterans by 2021 as well as
lessen the environmental effect of their cups and involve its staff in environmental
leadership2.
3. The 2020 report also included information on Starbucks' plans for assisting with
the global coronavirus epidemic3. Three key areas are the focus of the company's
pandemic response:
a. putting its customers' and workers' wellbeing first
b. assisting government and health officials in their efforts to reduce the
pandemic's consequences
c. displaying one's support for communities by taking sensible and
constructive action.
4. Today, there are a lot of socially conscious businesses, including Ben & Jerry's,
whose brands are well renowned for their CSR initiatives4.
5.

1
Starbucks. "2020 Global Environmental & Social Impact Report,
https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environmental-and-Social-
Impact-Report.pdft, " Pages 10 and 20.
2
Starbucks. "2020 Global Environmental & Social Impact Report,
https://stories.starbucks.com/uploads/2021/04/Starbucks-2020-Global-Environmental-and-Social-
Impact-Report.pdf" Page 9.
3
Ibid. Page 4
4
Ben & Jerry's. "Socially Responsible Causes Ben & Jerry's Has Advocated For,
https://www.benjerry.com/whats-new/2014/corporate-social-responsibility-history"

4
Chapter 1.2: Statement of Problem:
The purpose of the study is to analyse and shed light on the major modifications made
to the CSR policy as a result of the 2021 st Amendment and go into detail about how
the idea of CSR came to be in India. In addition, it will examine how the
modifications would affect the corporate sector in light of the COVID-19 outbreak
and emphasise its main shortcomings. Even though it is clear that the corporate social
responsibility component is weak, the business sector has greatly expanded and
thrived in India. However, the research reveals a growing trend in corporate
governance. This increasing trend can be observed in the Literature Review section.
Determining the drivers of business qualities and how they affect CSR disclosure
procedures is therefore crucial to understanding the study's significance. Moreover,
the study also discloses the latest amendments that have been done under Companies
(CSR) Rules 2021 and its effect over the pandemic situation. As part of the qualitative
research methodology, the Ministry of Corporate Affairs' notification about CSR and
the COVID epidemic as well as other prior research projects are taken into account in
this study. The study also explores if the adjustments made during the epidemic were
indeed helpful and whether any more adjustments would be necessary that would be
more beneficial.

5
Chapter 1.3: Objectives of the Study:

 To analyse CSR and its 2021st Amendment:

Under this objective the meaning of CSR, its definitions, history and evolution, its
advantages and importance in the society and mainly the 2021st amendment would
be analysed. Moreover, the main concept behind analysing these things would be
to understand the requirement of the CSR concept in corporate governance and
why was it necessary to bring out the amendments that has been done so far and to
evaluate whether there is any other modification further required or not.

 To evaluate the effectiveness of the CSR Amendment 2021 during the pandemic:
This goal entails a detailed analysis of the CSR Amendment 2021 in relation to
the pandemic situation and COVID 19. The idea behind adding the COVID-
specific special provision, Rule 2(d)(i) is also an object of the study.

 The extent to which the CSR policies need to be modified going forward:
This objective will include an analysis on whether the CSR rules are fully capable
of handling any situation today or in near future, or it need any further
modification in any of its field. It will also examine how the modifications would
affect the corporate sector in light of the COVID-19 outbreak and emphasise the
significant negative aspects of these changes.

6
Chapter 1.4: Hypothesis of the Study:
The research highlighted the primary hypothesis that is as follows:

H1: The introduction of CSR in Indian laws has helped the society at large and is
taking a large share in development of the country.

H2: Investing in CSR activities has helped the Indian Economy during pandemic to
not fall as compared to the other countries.

H3: When the majority of the businesses made financial contributions and offered
assistance to combat the issues caused by this pandemic, the amendment
regulations 2021 also played a significant role.

H4: The revisions have placed a strong emphasis on strict adherence to the Act while
also emphasising other crucial elements like responsibility and transparency
within the businesses engaging in CSR initiatives.

H5: Companies have stepped out to raise awareness about COVID-19 and the steps
that must be done to stop this virus from spreading in addition to contributing
money and other requirements like PPE Kits, masks, sanitizers, food, etc.

H6: Mandatory CSR rules have both made it simpler to see its application on
businesses and have also added certain drawbacks.

7
Chapter 1.5: Research Methodology:
1.5.1 Research Design:

The thesis examined the CSR Amendment Rule 2021 and its relevancy and how it
aided the pandemic situation. The research design here includes the following
elements:

a. True statement of the objectives,

b. Implementing strategies for gathering and assessing research,
c. The technique used to analyse the information gathered,
d. Research methodology type,
e. Potential research-related complaints Environment of the research study,
f. Timeline, and
g. Computation of analysis.

 The true statement of objectives mentioned above are to analyse CSR and its 21st
amendment, to evaluate the effectiveness of the CSR Amendment 2021 during the
pandemic and to evaluate the extent to which the CSR policies need to be
modified going forward. In order to meet the requirements and achieve the goal,
many prior research publications were taken into account. Additionally, the
Ministry of Corporate Affairs' announcements regarding changes and
modifications to CSR rules for enhancing the nation's situation during the
pandemic were also adhered to.

 Gathering previous research publications was the most important step toward
gathering information regarding the research objectives and to make the
hypothesis. For gathering and assessing research ‘Google Scholar’ 5 search engine
and the notifications of the ‘Ministry of Corporate Affairs’ 6 were used. Moreover,
many research works form ResearchGate7 were also been assessed.

 The techniques used for analysing the information gathered are as follows:

5
https://scholar.google.com/
6
https://www.mca.gov.in/content/mca/global/en/home.html
7
https://www.researchgate.net/
8
 a. Descriptive Analysis: A descriptive analysis method have been used to analyse
the information with the aim to answer the questions regarding what has
happened in the history and to gather the evolution concept of CSR. This
methodology involves modifying and interpreting raw data from numerous
sources.

b. Exploratory Analysis: Exploratory analysis in the next step towards analysing

data. Once the data has been looked into, exploratory analysis gives you the
ability to make connections and to generate hypothesis, and come up with
solutions to certain problems. Thus, the exploratory analysis helped to
generate hypothesis and to come to a conclusion for the research.

c. Predictive Analysis: Using the outcomes of earlier approaches, the predictive

method has made it possible to examine the issues present in the situation and
offer solutions for the future. Predictive analysis has thus made it simple to
create and implement my project that will not only improve my numerous
operational processes but also gave me a crucial competitive advantage.

d. Diagnostic Analysis: Analysing the justifications for the changes made in

accordance with CSR regulations was also important in order to comprehend
how future changes would have to be made in order to address concerns in the
future. Thus, descriptive analysis enabled me to become more powerful by
assisting me in developing a solid contextual understanding of why something
occurred.

 Doctrinal legal research methodology has been used in the study to analyse the
facts and come to a conclusion. Data is gathered from secondary and primary
sources, accordingly. Previous research articles, as well as reports and
announcements from the Ministry of Corporate Affairs, have all been examined in
order to study and analyse CSR in light of the pandemic situation.

 Both the positive and negative factors were taken into account when analysing the
analytical data. Every evolved idea has its detractors and encounters numerous
difficulties. The 21st CSR amendment saw the same outcome. In their CSR
reports, the majority of business organisations have condemned the 21st
9
 Amendment. They have come to the conclusion that making companies subject to
CSR requirements because of the epidemic has made it difficult for them to plan
their expenses as well as Companies are also attempting to adjust their operational
policies in accordance with the framework of the new CSR Rules that the MCA
announced in January. “These rules have made substantial changes to the
monitoring and evaluation of CSR activities as well as the utilisation of CSR
expenditure”8. The majority of NGOs also stated that they are still having
difficulty finding ways to expand their organisations, and that the imposition of
strict regulations on them has made it more challenging for them to consider
expansion.

 The majority of the time spent in this research's timeline was spent acquiring data
from various sources and analysing it to determine whether or not it was relevant
to the study's goal.

 In order to draw a conclusion and achieve the goals of the research, computation
of analysis was done. Analysis calculations must also be made in order to
calculate the study's hypothesis.

8
DIVYA J SHEKHAR, “Inside the reshaping of CSR in India during Covid-19”. Available at:
https://www.forbesindia.com/article/take-one-big-story-of-the-day/inside-the-reshaping-of-csr-in-india-
during-covid19/67821/1
10
1.5.2 Data Collection Methods:

Data is gathered from primary and secondary sources, accordingly. For the purpose of
examining and analysing the 21st CSR Amendment and its applicability to the
pandemic situation, the published annual reports, sustainability reports, and business
responsibility reports of the chosen companies, as well as the notifications and reports
of the governmental organisations, such as the MCA for the specific period of time,
were downloaded and analysed from their respective official websites. In order to
examine the disparities in the amount of CSR disclosures of Indian companies, a five-
year period is sufficient to study and compare the impact of CSR over the pandemic.

The researcher's methodology was solely doctrinal throughout the study. The
researcher examined relevant statutes, including the 2013 Companies Act, to achieve
this goal. He also investigated nearby published and unpublished material. Textbooks,
journals, case reports, articles, encyclopaedias, dictionaries, research papers,
periodicals, and other secondary sources were studied and some determined real cases
were analysed. The internet is also used to get crucial data related to the study subject.

1.5.3 Content Analysis:

The annual reports and notifications of MCA and some of the corporations have been
subjected to content examination. According to Prashad, “Large-sentence analysis is a
research technique for breaking them down into specific codes so that conclusions can
be drawn from the data.” “It enables the researcher to better comprehend and test
theoretical implications of the data.”9 Content analysis is used as a tool to analyse and
compare the previous research works that has been done in the concerned research
field. Thus, the content analysis is the most important method of conducting an
analytical form of research work and is the most useful tool that has helped me to
analyse the data I have gathered from various sources.

9
Elo and Kyngas, 2007
11
1.5.4 Reliability of Content Analysis:

When an instrument is used repeatedly with similar individuals and the same
environmental conditions, it is said to be reliable when its measurements are
consistent. Its essence can be summed up as measuring repeatability. Consistency is
fundamental to reliability in qualitative research. If the methodology and
epistemological logistics consistently provide data that are ontologically comparable
but may differ in richness and ambience within similar dimensions, a margin of error
for outcomes is acceptable in qualitative research. Researchers must continuously
compare the data they have collected from the original sources, either by themselves
or with other researchers, to ensure that they are accurate in terms of form and context
(a form of triangulation).

Analysing errors will never be completely eradicated; instead, they can only be
decreased due to the human character of researchers. Typically, a dependability
margin of 80% is acceptable. A content analysis's dependability is based on three
factors:

a. Stability
b. Reproducibility
c. Accuracy

1.5.5 Validity of Content Analysis:

In this study the data has been collected from various annual reports of the companies
that has been gathered from the official websites of the companies and the articles of
the ‘Forbes India’ as well as from the official notifications of the Ministry of
Corporate Affairs.

The "adequateness" of the tools, methods, and data is what qualitative research
validity refers to. The validity of the research question for the intended result, the
appropriateness of the methodology choice, the design's suitability for the
methodology, the appropriateness of the sampling and data analysis, and finally the
appropriateness of the findings and conclusions for the sample and context. The
validity of a content analysis is based on three factors:

12
Closeness of categories can be attained by using several classifiers to determine a
common definition for each distinct category.

Conclusions How much implication is permitted? Do conclusions accurately

correspond to the data? Can other phenomena be used to explain the results? When
analysing data and identifying synonyms using computer tools, this becomes more
challenging.

The capacity to generalise the findings to a theory depends on how well concept
categories are defined, how they are chosen, and how well they capture the concept
being measured. Generalizability and dependability are similar in that they both
heavily rely on the three reliability criteria.

13
Chapter 1.6: Limitations of the Study:
There are various restrictions on the current study that must be taken into account.
These limitations include firstly the time limit of the study. When compared to the
COVID epidemic and the most recent amendment, the notion of CSR has a much
wider scope, thus it is important to understand the concept's history with
consideration. The time frame in which the study is done was not sufficient to do the
overall study as the concept is of very wide nature. Secondly, the study is properly
based on the analytical concept of research method. The data gathered in the study is
mainly based on the website data of the Ministry of Corporate Affairs (Circulars of
MCA, Notifications of MCA regarding 21st amendment and COVID pandemic and
the FAQ’s that has been clarified by MCA) and the data from various published
articles. Finally, since there were several different industrial sectors covered by the
study, it's possible that some of the difficulties that might be significant for one area
don't necessarily apply to another.

14
Chapter 1.7: Literature Review on Historical Background:
This era of greater knowledge and information propels us toward the quick changes
that are intensifying throughout time. A researcher must therefore be more aware of
the advancements and changes in the field he is researching. For the purpose of
enhancing knowledge and understanding, the researcher must peruse the available
literature, which includes books, novels, reports, prior studies, articles, newspapers,
and journals. The idea of corporate social responsibility has grown in importance over
the last few decades. Therefore, it is the duty of the researcher to put forth some effort
by reading the papers of earlier researchers, analysts, and businesspeople who have
studied topics related to corporate social responsibility. These topics could include
social responsibility, social accounting, social reporting, or any other related subject.

Drucker stated in 1946's “The Future of Industrial Man” that, “the harmony between a
company's goals, the goals of the political system, and the goals of its customers
determines whether or not it will survive. The company enterprise would be stuck in
the middle of the road if the goals of these three interactive players clashed. As a
result, businesses are accountable for workers' status as human beings, their human
dignity, and their ongoing training and development as a resource rather than a
cost.”10

According to “Concept of the Corporation” by Bowen & Howard, corporations are

required to adopt and implement CSR policies that uphold the social values of the
community11. In 1960, Davis & Kieth explained CSR as “Execution of the businesses
policies shall not be restricted to the firm's corporate interests only rather it should
also cater for the socio- legal aspects as well”.

According to Archie Carroll's definition from 1979, social responsibility is a

collection of expectations that society has of corporate companies that operate inside
its borders in terms of economics, law, ethics, and discretion. By examining the past
and present trends in CSR, Caroll's model analysis in a global setting highlights the
three new corporate social responsibility alternatives: stakeholder management
techniques, global corporate citizenship, and responsibility conception.
10
“The Future of Industrial Man” by Peter Drucker, 1946
11
Page. 18 “Concept of the Corporations” by Bowen & Howard, 1953
15
The Economic Times (2012) reported on the opinions expressed by the former
president Dr. APJ Abdul Kalam during a CSR award ceremony hosted by the business
group Assocham. According to Kalam, businesses should allocate a portion of their
goals to providing corporate services. All businesses should be required to contribute
a certain amount of their profits to corporate social responsibility. Kalam also spoke
about the planned legislation governing business CSR spending. They believed that
CSR played a bigger role in improving citizens' quality of life.

In an article titled “CSR: A cloak for crooks”12 that appeared in The Economic Times
on October 21, 2012, it was discussed how many businesses participate in corporate
social responsibility programmes while still experiencing financial hardship, fraud,
and other unsavoury issues. This article uses the business Satyam Computer Services
as an example. The business has received numerous accolades for its devotion to
community involvement, which includes providing amenities like water, healthcare,
and education to rural areas.

12
Article by Economic Times, “CSR: A cloak for crooks” https://m.economictimes.com/swaminathan-
s-a-aiyar/csr-a-cloak-for-crooks/articleshow/16899060.cms
16
Chapter 1.8: The components of CSR that are used in empirical studies:
The correlation between a company's social and financial performance is studied by
Waddock and Graves13. They use the 8 indexes developed by the company KLD to
gauge corporate social performance, and 5 of the 8 attributes—including community
relations, environmental protection, relations with employees, treatment of women
and minorities, and product attributes—place a focus on relations with stakeholders.
Sen and Bhattacharya14 conduct an empirical investigation into the influence of
‘Corporate Social Responsibility’ (CSR) on consumer purchasing behaviour. They
gauge CSR using five criteria: participation in the community, diversity,
environmental protection, social causes, and treatment of foreign workers.

Pivato and Misani15 undertake research on the relationship between corporate social
responsibility and consumer loyalty to brands. To gauge corporate social
performance, they use the environment dimension, consumer dimension, and
employee dimension Abdullah and Rashid16 evaluate how ‘CSR implementation’
affects corporate citizenship practises. They included ‘CSR to the government’, ‘CSR
to the employee’, ‘CSR to society’, ‘CSR to environmental preservation’, and ‘CSR
to the customer’ among the dimensions of CSR in their study.

Wen and Fang17 conduct an empirical analysis on the connection between CSR and
financial success using data from 46 publicly traded firms in China between 2003 and
2007. This study is based on domestic literature. They gauge CSR using a range of
capital, such as the duties owed to stakeholders of human capital, social capital,
ecological capital, and financial capital. Xie and Zhou 18 look into how CSR affects

13
Waddock SA, Graves SB. The corporate social performance [J]. Strategic Management Journal.
1997, 8(4):303-19.
14
Sen S, Bhattacharya CB. Does doing good always lead to doing better? Consumer reactions to
corporate social responsibility [J]. Journal of marketing Research. 2001, 38(2):225-43.
15
Pivato S, Misani N, Tencati A. The impact of corporate social responsibility on consumer trust: the
case of organic food [J]. Business Ethics: A European Review. 2008, 17(1):3-12.
16
Abdullah MH, Rashid NRNA. The Implementation of Corporate Social Responsibility (CSR)
Programs and its Impact on Employee Organizational Citizenship Behavior [J]. International Journal of
Business and Commerce. 2012, 2(1):67-75.
17
Wen SB, Fang Y. Empirical study on the relationship between corporate social responsibility and
financial performance--analysis on panel data from stakeholder perspective [J]. China Industrial
Economics. 2008(10):150-9.
18
Xie PH, Zhou ZC. Empirical study on the relationship between corporate social responsibility and
consumer purchase intention in China [J]. NanKan Business Review. 2009, 12(1):64-70.
17
consumer buying intent. The preservation of consumer rights and interests,
participation in philanthropy and charitable giving, care for environmental protection,
and employee interests are the five criteria used to evaluate CSR.

18
Chapter 1.9: Studies on CSR and CSR during COVID:

 Niteesh Kumar Upadyay and Mahak Rathee (2021)19:

In their study, “AN ANALYSIS OF CORPORATE SOCIAL RESPONSIBILITY
IN INDIA WITH SPECIAL REFERENCE TO COVID-19 SITUATION”,
Niteesh Kumar Upadyay and Mahak Rathee analysed and examined CSR in India
with a focus on the pandemic scenario. They came to the conclusion in the article
that, "Many businesses have actively participated by making contributions to CSR
Activities above and beyond the CSR budget allotted to them in light of the
present pandemic crisis and its effects on the economy. Companies have stepped
up to raise awareness about COVID-19 and the steps that must be done to stop
this virus from spreading in addition to providing finances and other requirements
like PPE Kits, masks, sanitizers, food, etc ".

 Manish Dwivedi and Vineet Kumar (2021)20:

According to Manish Dwivedi and Vineet Kumar in their article, “Impact of
lockdown and CSR activities undertaken by the corporates during COVID-19 in
India”, “The business houses' various contributions contributed to combat the
pandemic that has been thoroughly covered in the paper. To accommodate the
immediate need for treating COVID-19 patients, some businesses were making
and offering masks, sanitizers, and PPE kits to healthcare professionals. The
businesses assisted the hospitals by making testing kits available, monitoring the
screening process for assessing COVID-19 patients, gathering a sample from the
patient's house, making a diagnosis, providing test results, etc.”

 M K Ganeshan and Vethirajan .C (2020)21:

In their article, “THE ROLE OF INDIAN COMPANIES TOWARDS CSR
DURING COVID - 19 PANDEMIC”, M K Ganeshan and Vethirajan.C came to

19
Upadhyay, Niteesh Kumar & Rathee, Mahak. (2021). “AN ANALYSIS OF CORPORATE SOCIAL
RESPONSIBILITY IN INDIA WITH SPECIAL REFERENCE TO COVID-19 SITUATION.” 42-61.
20
International Journal of Indian Culture and Business Management 22(4):558; Follow journal;
DOI: 10.1504/IJICBM.2021.115001
21
Ganeshan, M K & .C, Vethirajan. (2020). “THE ROLE OF INDIAN COMPANIES TOWARDS
CSR DURING COVID - 19 PANDEMIC.”
19
 the conclusion that, “The COVID-19 consequences have given corporate social
responsibility a stress test like no other. Risks and opportunities exist in any
crises, and this is what we have seen so far in our research. All types of businesses
have seized the chance to further ingrain themselves in the social fabric of the
localities in which they operate. In this situation, CSR offers a mechanism to
safeguard worker loyalty, investor confidence, and consumer trust. The ability of
CSR practises to be effective in reacting to a crisis is perhaps the most
straightforward lesson we can learn all over again.”

 Koutoupis, A., Kyriakogkonas, P., Pazarskis, M. and Davidopoulos, L. (2021)22:

In their study “Corporate governance and COVID-19: a literature review,”
Koutoupis, A., Kyriakogkonas, P., Pazarskis, and Davidopoulos (2021) noted that
“CG in the context of COVID-19 has primarily been examined in industrialised
nations and within a theoretical framework. The lack of accounting data
necessitates additional investigation worldwide (developed, emerging and other).
Additionally, no clear findings have been made relating the importance of ESG
and CSR to financial performance. To fully explain the effect of COVID-19 on
CG, future research should employ more approaches and data sources.”

 Kee-Hong Bae, Sadok El Ghoul, Zhaoran (Jason) Gong, and Omrane Guedhami
(2021)23:
In this research, “Does CSR matter in times of crisis? Evidence from the COVID-
19 pandemic,” Kee-Hong Bae, Sadok El Ghoul, Zhaoran (Jason) Gong, and
Omrane Guedhami examined the relationship between CSR and stock market
returns during the COVID-19 pandemic-induced market crisis. The pandemic is a
real exogenous shock of unprecedented proportions that has drawn more attention
to businesses' social and environmental engagement and made it possible to
clearly determine if CSR adds value in difficult times.
22
Koutoupis, A., Kyriakogkonas, P., Pazarskis, M. and Davidopoulos, L. (2021), "Corporate
governance and COVID-19: a literature review", Corporate Governance, Vol. 21 No. 6, pp. 969-
982. https://doi.org/10.1108/CG-10-2020-0447
23
“Journal of Corporate Finance”, Volume 67, April 2021, 101876;
https://doi.org/10.1016/j.jcorpfin.2020.101876
20
 S.M. Ramya and Rupashree Baral (2021)24:
Ramya, S.M. and Baral, R. (2021) in "CSR during COVID-19: exploring select
organizations’ intents and activities" observed that, “results of the analysis
showcase the spirited immediate CSR measures undertaken by the select
organizations in the broader interests of the community at large. The study also
highlights the need for a paradox approach toward CSR strategy.”
Additionally, it has been highlighted that’ “the organisations have made
contributions to a number of social causes; nonetheless, it has been noted that their
outlook on ongoing CSR initiatives and COVID-19 CSR initiatives is short-
termist. In the future, CSR practitioners will be expected to use a paradox
approach to responsibly channel their CSR spending.”

 M.S. Sai Vinod, Pranav Umesh and N. Sivakumar (2022)25:

In their study, M.S. Sai Vinod, Pranav Umesh, and N. Sivakumar “Impact of
COVID-19 on corporate social responsibility in India – a mixed methods
approach” demonstrated that "The results highlighted the change in the CSR
approach from being reactive to being proactive as the pandemic progressed. The
frequency of CSR legislation has increased, and its original goal of "prompting to
donate" has been changed to “prompting to volunteer”. Similar to this, the
improvement in COVID-related CSR reporting and greater spending on CSR
indicate that business responses to CSR are now more proactive than reactive.”

 Somya Arora, Jagan Kumar Sur, and Yogesh Chauhan (2021)26:

Somya Arora, Jagan Kumar Sur, and Yogesh Chauhan in their article, “Does
corporate social responsibility affect shareholder value? Evidence from the

24
Ramya, S.M. and Baral, R. (2021), "CSR during COVID-19: exploring select organizations’ intents
and activities", Corporate Governance, Vol. 21 No. 6, pp. 1028-1042. https://doi.org/10.1108/CG-09-
2020-0426
25
M.S.S.V., Umesh, P. and , N.S. (2022), "Impact of COVID-19 on corporate social responsibility in
India – a mixed methods approach", International Journal of Organizational Analysis, Vol. ahead-of-
print No. ahead-of-print. https://doi.org/10.1108/IJOA-03-2022-3206
26
“Does corporate social responsibility affect shareholder value? Evidence from the COVID-19 crisis”
by Somya Arora ,Jagan Kumar Sur, and Yogesh Chauhan; International Review of Finance, Vol. 22,
Issue 2; https://doi.org/10.1111/irfi.12353
21
 COVID-19 crisis” observed that, “the need of good corporate governance
procedures in preventing managerial appropriation during a time of crisis is
necessary”. Also, through the descriptive statistics presented by them give a full
disclosure over their conclusion.

 Anshika Gubrele and Shivangi Sinha (2021)27:

In their article “Analysing the CSR amendment rules 2021: Major changes and
their impact in light of COVID-19,” Anshika Gubrele and Shivangi Sinha noted
some significant drawbacks of corporate social responsibility (CSR), which they
found to be generally acceptable. They also came to the conclusion that "the
amendment rules 2021 have also played a vital role during this pandemic when a
majority of the companies contributed financially and extended a helping hand to
fight against the problems that arose due to this pandemic."

 Akshaya Kamalnath (2021)28:

Akshaya Kamalnath’s study on “A Post Pandemic Analysis of CSR in India” also
clears out some of the impacts of the CSR during the COVID era as well as the
post pandemic era. His research was mainly based on the contribution of CSR and
other Corporate Governance related factors that have helped the society during the
pandemic.

 Aparna Bhatia and Amandeep Dhawan (2021)29:

According to “A paradigm shift in corporate social responsibility: India’s
transition from mandatory regime to the COVID-19 era”, Aparna Bhatia and
Amandeep Dhawan's journal entry, “the results demonstrate that over the whole
study period, CSRE produced by businesses has been rising annually.

27
Gubrele, Anshika and Sinha, Shivangi, Analysing the CSR Amendment Rules 2021: Major Changes
and Their Impact in Light of COVID-19 (October 17, 2021). Taxmann Publications 2021, Available at
SSRN: https://ssrn.com/abstract=3990858
28
16 J. Comp. L. 714 (2021), “A Post Pandemic Analysis of CSR in India” by Akshaya Kamalnath,
Available At:
https://heinonline.org/HOL/LandingPage?handle=hein.journals/jrnatila16&div=48&id=&page=
29
Bhatia, A. and Dhawan, A. (2021), "A paradigm shift in corporate social responsibility: India’s
transition from mandatory regime to the COVID-19 era", Social Responsibility Journal, Vol. ahead-of-
print No. ahead-of-print. https://doi.org/10.1108/SRJ-01-2021-0020
22
Additionally, Indian businesses went above and beyond the necessary restrictions
to voluntarily contribute a sizeable sum to the COVID-19 relief “. They further
provider that, “the gradual increase in CSR contributions even above the required
amount and the voluntary contribution towards COVID-19 relief by Indian
corporations, implies that the character of CSR in India is still altruistic”.

23
Chapter 1.10: Studies on CSR Amendment Rule 2021:
A number of authors, researchers, and academics have analysed and criticised the
Ministry of Corporate Affairs' CSR Amendment Rule 2021. Some of these studies are
quoted bellow:

 Rahul Rishi and Dr. Milind Antani (2021)30:

The article “India-Amendments to CSR Rules: A Game Changer” by Rahul. R
and Dr. Milind Antani, authors reviewed the significant changes brought about by
the 2021st Amendment before summarising their opinion of the change. Their
findings were, “This is valued since it effectively lessens the excessive discretion
held by a corporation, improves clarity, and introduces some uniformity by
outlining the processes to be followed in specific situations. Some provisions
remain a little ambiguous, such as Rule 10 of the New Rules, which refers to the
transfer of unused CSR funds to those already listed in Schedule VII but skips
over the issue of creating a new Fund for the purposes of Sections 135(5) and
135(6) of the Companies Act, which was raised in the 2020 Draft Rules.”

 Samheeta Rao (2021)31:

Samheeta Rao, in her article “New amendments to the CSR Act: All you need to
know”, outlined the changes to the CSR Rules that the Indian government had
formally approved, as well as a detailed list of the implications for businesses and
organisations.

 Rakesh Nangia (2021)32:

Rakesh Nangia examined “corporate social responsibility expenditure as a
deduction from business income”, the case of “double allowance”, and the

30
India-Amendments to CSR Rules: A Game Changer by Rahul Rishi and Dr. Milind Antani,
Available at: https://www.natlawreview.com/article/india-amendments-to-csr-rules-game-changer
31
“New amendments to the CSR Act: All you need to know” Published on  India Development
Review., by Samheeta Rao; https://idronline.org/new-csr-act-amendments-updates-and-all-you-need-to-
know/
32
“A Closer look at CSR law” by Rakesh Nangia, Available At:
https://www.thehindubusinessline.com/business-laws/a-closer-look-at-csr-law/article33897046.ece
24
 necessity for consistent tax policies with reference to the Companies (CSR)
Amendment Rule 2021 in his article, “A closer look at CSR law.”

 Ena Kapur (2021)33:

Ena Kapur in the “Analysis of Companies (Corporate Social Responsibility)
Amendment Rules, 2021: A Complete Overhaul”, concluded that, “the new Rules
were enacted to ensure uniformity in the CSR regime while increasing
transparency and accountability from companies. But the Rules can suddenly
come across as being authoritarian. Companies are not motivated to comply with
the CSR laws, especially during the present epidemic, and as a result, the market
is far from being stimulated by the substantial requirements and duties placed
upon enterprises. They also have an easy way out, which goes against the
mandated character of CSR and permits it to stay voluntary because there are no
criminal law sanctions, as was previously indicated. Thus, the original intent
behind its construction is defeated. Therefore, despite the fact that the new Rules
totally overhauled the entire CSR process, they still fall short of effectively
putting the notion of CSR into practise. To establish sufficient and transparent
CSR regimes, it is important to change the Rules and loosen their grip.”

33
Ena Kapur, “Analysis of Companies (Corporate Social Responsibility) Amendment Rules, 2021: A
Complete Overhaul”, https://www.gblr.in/post/analysis-of-companies-corporate-social-responsibility-
amendment-rules-2021-a-complete-overhaul
25
Chapter 1.11: Studies on Impact of CSR:

 George Odongo M, Jamin Masasabi Masinde, Eric R Masese and Willice Abuya
(2019)34:
According to the research, “The Impact of CSR on Corporate-Society Relations”,
by George Odongo M, Jamin Masasabi Masinde, Eric R Masese, and Willice
Abuya, “The improvement of existing CSR programmes and establishment of new
ones is in line with organization's commitment to assessing and taking
responsibility for its impacts on environmental and social wellbeing through CSR,
which can take many different forms but whose core purpose is to contribute to
sustainable development carried out in a manner that is in line with the UN
Sustainable Development Goals.”
They continued by saying that, “from a social standpoint, CSR should benefit the
community because it is made up of people who have varying degrees of authority
over both tangible and intangible resources and has a very complicated structure.
Knowing the theories helps scholars better comprehend corporation-society
connections, in which theories and practises of CSR are influenced by multiple
economic and non-economic as well as internal and external variables. This is
because the current meaning of CSR is complicated.”

 Sudeshna Saha (2013)35:

Sudeshna Saha stated in her paper “Essence of CSR in Modern Society” that, “It
should be highlighted that while CSR is a useful tool, the aforementioned
drawbacks can deter businesses from taking part. The corporation's ability to
participate and voluntary inclinations (if not ones that are forcibly imposed by the
government) are what motivate them to develop CSR strategies. However, it is
undeniable that CSR has assimilated into the corporate environment and that its

34
“The Impact of CSR on Corporate-Society Relations” by George Odongo M, Jamin Masasabi
Masinde, Eric R Masese, and Willice Abuya. Available At:
https://www.researchgate.net/publication/337566698_The_Impact_of_CSR_on_Corporate-
Society_Relations
35
“Essence of CSR in Modern Society” by Sudeshna Saha. Available At:
https://www.researchgate.net/publication/263855393_Essence_of_CSR_in_Modern_Society
26
 goals and applications go far beyond only the public good and sustainable
development.”

 Paulina Księżak (2017)36:

Paulina Ksiak found in his research “The Benefits from CSR for a Company and
Society” that, “Working for the common good allows firms to reap financial
rewards while also establishing a good name and gaining respect from the public,
which strengthens their position in the market. The society in which these
businesses operate can see improvements in the infrastructure, technology, and
educational systems, as well as in people's security and health. In general, abiding
by CSR guidelines may raise the standard of life for those who live close to the
socially conscious company.”

 Malcolm F. Arnold (2010)37:

Arnold clarified in his study, “Competitive advantage from CSR programmes:
From Risk Management to Value Creation” that, “Trainings, which are
occasionally organised for individuals outside of businesses, are very beneficial
for society. They increase population knowledge and give it practical skills that
might benefit locals in daily life. Health-related CSR initiatives raise public
awareness of the issue and have a behavioural impact by persuading individuals to
get regular checkups and instilling in them the belief that prevention is always
preferable than cure. A society that is healthier and more educated results from
these efforts.”

36
KSIĘŻAK, Paulina. The Benefits from CSR for a Company and Society. Journal of Corporate
Responsibility and Leadership [online]. 26 June 2017, T. 3, nr 4, s. 53–65. [accessed 3.8.2022].
DOI 10.12775/JCRL.2016.023. https://apcz.umk.pl/JCRL/article/view/JCRL.2016.023
37
“Competitive advantage from CSR programmes: From Risk Management to Value Creation” by
Malcolm F. Arnold. DOI: 10.4324/9781351279000-6
27
 CHAPTER-2
History And Evolution
Of CSR
Comprehension the meaning of Corporate Social Responsibility (CSR) and having a
thorough understanding of the research issue are the goals of this chapter. We'll learn
about CSR in this chapter, along with its definition, context, and timeline of Indian
growth. We will also talk about the rationale for the creation of CSR policies in India
as well as the modifications made to them through time. Understanding how CSR
aided in overall nation during the COVID circumstance is the study's key goal and to
find out if there is a need for future policy adjustment and, if so, what those
modifications should be.

Chapter 2.1: Definitions of CSR:

“Decisions and actions taken for reasons at least partially beyond the firm’s direct
economic or technical interest” Keith Davis (1960)38.

“Problems that arise when corporate enterprises cast its shadow on the social scene,
and the ethical principles that ought to govern the relationship between corporations
and society” Walton and Eells (1961).

“The social responsibility of business encompasses the economic, legal, ethical and
discretionary expectations that a society has of organizations at a given point in time”
Archie B Caroll (1979)39.

Philip Kotler and Nancy Lee define CSR as “a commitment to improve community
wellbeing through discretionary business practices and contributions of corporate
resources”.
38
Davis, Keith 2/3 (Spring 1960): 70-76
39
Carroll 1979, 1991
28
“Corporate Social Responsibility is the continuing commitment by business to behave
ethically and contribute to economic development while improving the quality of life
of the workforce and their families as well as of the local community and society at
large”40 World Business Council for Sustainable Development.

“Corporate Social Responsibility is a management concept whereby companies

integrate social and environmental concerns in their business operations and
interactions with their stakeholders”41, UNIDO (United Nations Industrial
Development Organisation)

“Corporate Social Responsibility is an organisation’s obligation to consider the

interests of their customers, employees, shareholders, communities and the ecology
and to consider the social and environmental consequences of their business activities.
By integrating CSR into core business processes and stakeholder management,
organisations can achieve the ultimate goal of creating both social value and corporate
value”42 Stanford University.

‘Harvard’s Kennedy School of Business’ defines CSR as “CSR encompasses not only
what companies do with their profits, but also how they make them. It goes beyond
philanthropy and compliance and addresses how companies manage their economic,
social, and environmental impacts, as well as their relationships in all key spheres of
influence: the workplace, the marketplace, the supply chain, the community, and the
public policy realm”.

40
World Business Council for Sustainable Development (2000),
https://www.social-responsibility.at/definitions/world-business-council-for-sustainable-development-
2000/
41
UNIDO’s definition of CSR. https://www.unido.org/our-focus/advancing-economic-
competitiveness/competitive-trade-capacities-and-corporate-responsibility/corporate-social-
responsibility-market-integration/what-csr
42
“Corporate Social Responsibility and Social Entrepreneurship”, David P. Baron DOI:  
https://doi.org/10.1111/j.1530-9134.2007.00154.x
29
Chapter 2.2: Evolution of CSR:
In the past two decades, Corporate Social Responsibility's (CSR) importance has
escalated. Organizations are aware that their CSR investment contributes to long-term
brand development, consumer base growth, goodwill, and other outcomes. CSR as a
component of an organization's strategy is becoming more audacious and brilliant
every day.

CSR was not unexpectedly discovered. It has been practised in various forms from the
beginning of time. The definitions of CSR changed as the notion did as time went on.
There are several more terms that are used interchangeably but with little variances,
such as corporate citizenship, environmental sustainability, and corporate social
performance.

A report of “the Special Representative of the United Nations Secretary-General on

the issue of human rights and transnational corporations and other business
enterprises”43 provides a discussion on “Protect, Respect and Remedy a Framework
for Business and Human Rights” by John Ruggie 44 says that, “The international
community is still in the early stages of adapting the human rights regime to provide
more effective protection to individuals and communities against corporate related
human rights harm. This report to the Human Rights Council presents a principles-
based conceptual and policy framework intended to help achieve this aim”45.

He also added that, “Business is the major source of investment and job creation, and
markets can be highly efficient means for allocating scarce resources. They constitute
powerful forces capable of generating economic growth, reducing poverty, and
increasing demand for the rule of law, thereby contributing to the realization of a

43
“Report of the Special Representative of the United Nations Secretary-General on the issue of human
rights and transnational corporations and other business enterprises.” https://direct.mit.edu/itgg/article-
pdf/3/2/189/704354/itgg.2008.3.2.189.pdf
44
As the UN Secretary-Special General's Representative for Business and Human Rights, John Ruggie
holds the positions of Kirkpatrick Professor of International Affairs, Director of the Mossavar Rahmani
Center for Business and Government, Affiliated Professor in International Legal Studies at Harvard
Law School, and Professor of International Affairs at the Kennedy School of Government at Harvard
University.
45
“Report of the Special Representative of the United Nations Secretary-General on the issue of human
rights and transnational corporations and other business enterprises.” https://direct.mit.edu/itgg/article-
pdf/3/2/189/704354/itgg.2008.3.2.189.pdf
30
broad spectrum of human rights. But markets work optimally only if they are
embedded within rules, customs, and institutions”46.

“In developing countries, the government alone cannot uplift the downtrodden.
Hence, it is even more important for business houses and organisations to help
eradicate the various social problems such as education, healthcare etc. In India, The
Companies Act 2013 mandatory requires with all companies worth of 500 crores or
more or turnover of 1000 crores or more or profit of 5 crores or more to spend at least
2% of its average net profit for the preceding three financial years on corporate social
responsibility activities. The key to ensuring CSR compliance with benefits to the
organisation is ‘Strategic CSR’ where an organisation’s goals are in line with its’
social responsibilities. Most of the organisations are adopting strategic CSR which,
indeed, creates ‘shared value’.”47

According to the Henk Campher, “CSR is not a revolution but an evolution” 48. “It
existed in some form or the other but its’ importance have grown over the years
owing to various factors such as increased stakeholder’s awareness and demands.”49

Many owners in the 19th century took an active, and in many cases, a leading, part in
the growth of the local communities and societies where they were headquartered.
Business leaders provided financial contributions above and beyond their taxes to
fund infrastructure projects, museums, sports, and recreation facilities. They assisted
in the construction of schools and universities. Many of the public facilities found in
great cities like Manchester, Bombay, New York, and Sydney were donated by the
era's commercial titans, including libraries and concert halls.

Business moguls like Carnegie, Rockefeller, and Wellcome established new standards
in corporate charitable behaviour by establishing large foundations to carry on the
community service they considered as their civic responsibility or good citizenship.
This custom appears to have been founded on two contrasting goals.

46
“Report of the Special Representative of the United Nations Secretary-General on the issue of human
rights and transnational corporations and other business enterprises.” https://direct.mit.edu/itgg/article-
pdf/3/2/189/704354/itgg.2008.3.2.189.pdf
47
The Competitive Advantage: Creating and Sustaining Superior Performance, 1985 by Michael E.
Porter
48
Campher, 2011
49
Caroll, The Four Faces of Corporate Citizenship, 1998
31
 First, affluent manufacturers were expected to give to charity since it was a
Christian principle frequently espoused that people in positions of power and
money should assist those in need.

Second, there was a component of social investment, where firms would reap
long-term rewards from having top-notch educational institutions like
universities, technical centres, and schools nearby. For instance, business
leaders frequently founded American business schools, which continue to
enjoy strong corporate funding. Bowen has been referred to as the
"contemporary Father of Corporate Social Responsibility" by Carroll, who
sees his writings as ushering in the current era of CSR literature.

Professor Sandra L. Holmes carried out a survey on CSR in 1976 to learn how choices
about what causes to support were formed. According to her findings from the
Executive perspectives of corporate social responsibility are;

“Utilizing a corporation’s ability to help a specific need”

“Severity of a social need”

“Executive interest”

“PR gained from action”

“Government influence”

The aforementioned points were succinctly stated by Professor Archie B. Carroll in

1979's “A Three-Dimensional Conceptual Model of Corporate Performance”, which
produced a model to make CSR less hazy. He pointed out that, “That these disparate
factors should show up in a response to a question of this kind suggests clearly that
business executives do not have a consensus on what social issues should be
addressed”.

The Evolution of the Corporate Social Performance Model 50, debuted in 1985
interpreted Carrol’s definition of CSR under the following three heads:
50
Wartick, Steven L., and Philip L. Cochran. “The Evolution of the Corporate Social Performance
Model.” The Academy of Management Review 10, no. 4 (1985): 758–69.
https://doi.org/10.2307/258044

32
  companies adopted principles (or ethics),
 created and executed formal processes (how they would respond),
 and developed policies (managing specific issues).

The history of how corporate social responsibility (CSR) influences an organization's

behaviour is extensive.

“In the 1960s, key events, people and ideas have played an important role in characterizing the
social changes ushered in during this decade.”

“In the 1970s, business leaders on traditional management functions in matters of corporate
social responsibility.”

“In 1980, the business and social interests of the company came closer and become more
responsive to their members.”

“In the 1990s, the idea of CSR has become almost universally accepted, CSR also has been
associated with the strategy literature.”

“Finally, In the 2000s, CSR has finally become an important strategic issue.”

33
Chapter 2.3: Evolution of CSR in India:
The concept of “Good Governance and Responsibility of Business”, now known as
“Corporate Social Responsibility”, is not new for one of the oldest Indian cultures. It
is an intrinsic part of Indian culture. On the basis of ‘Vedic Darshan’, “Sarva Loka
Hitam i.e., Well Being of Whole Nature”, in an important concept of Indian Culture.
It has regained significance in the current period, which is marked by the impact of
globalisation and is full of unexpected challenges and fresh promise. In addition to the
aforementioned, Kautilya's philosophy (Kautilya's Arthashastra51) said that for good
administration, all administrators, including the king, were regarded servants of the
people. His theory holds that the king has any sense of individuality. He represents the
people and is one of them.

The next roots of corporate social responsibility are ingrained in Indian culture, and
they can be found in 1917, when Henry Ford declared that Ford Motor Company's
mission is to “do as much as possible for everybody concerned, to make money and
use it, give employment, and send out the car where the people can use it, and
incidentally to make money”52.

CSR initiatives are very important in the context of business ethics 53. Researchers and
CSR practitioners have been interested in a number of results during the past 57
years. Among them are studies that claim CSR initiatives offer an "insurance-like"
buffer against unfavourable circumstances54.

Corporate Social Responsibility is conceptualised on corporations acting as partners

in the process of social development of the nation. The notion of CSR began to
develop in India during the period of economic liberalization and got popularity
during the early 2000s when several multinational companies set up businesses in
India55.

51
Kautilya’s Arthashastra- https://www.worldhistory.org/Arthashastra/
52
Lee, 2008
53
Maignan and Ferrell, 2004
54
Godfrey et al. 2009
55
Report of the High-Level Committee on Corporate Social Responsibility 2018, Ministry of Corporate
Affairs
34
In 2009, ‘the Ministry of Corporate Affairs (MCA) came up with CSR Voluntary
Guidelines to promote Corporate Social Responsibility and then in 2011, it came up
with National Voluntary Guidelines on Social, Environmental, and Economic
Responsibilities of Business. Since the guidelines were only voluntary, it was
observed that only limited companies implemented them’56.

Following that, under Section 135 of the Companies Act of 2013, CSR was made a
mandatory obligation in order to make it an essential part and core of business
philosophy. Following that, the CSR Policy Rules, 2014 established certain
specifications and procedures that companies must follow when fulfilling their CSR
obligations. The Companies Amendments Acts of 2019 and 2020 made significant
changes to the CSR provision under Section 135 of the Companies Act. Finally, in
January 2021, the MCA notified the Companies CSR Policy Amendment Rules,
which gave effect to the changes in CSR introduced by the Companies Amendment
Acts of 2019 and 2020.

In India, CSR has progressed through several stages, including community

engagement, socially accountable production, and socially accountable employee
relations. Its history and evolution can be broken down into four major stages:

Phase I: The first phase of CSR is distinguished by its charitable and

philanthropic nature. Family values, traditions, culture, and religion, as well as
industrialization, all had an impact on CSR. The wealth of businessmen was
used to benefit society by establishing temples and religious institutions.
During times of drought and famine, these businessmen opened their granaries
to the poor and hungry. As the colonial era began, this approach to CSR
changed dramatically. Prior to independence, the forefathers of
industrialization, such as Tata, Birla, Godrej, and Bajaj, promoted the concept
of CSR by establishing charitable foundations, educational and healthcare

56
Amit Kapoor and Aayush Sood, “Impact of Proposed Amendment to Corporate Social Responsibility
Norms”, Legal Era, www.legaleraonline.com/ amp/articles/ impact-of proposed-amendment-to-
corporate-social-responsibility-norms
35
institutions, and community development trusts. Politics drove social benefits
during this time period.

Phase II: The second phase occurred during the American Revolution.
Mahatma Gandhi urged wealthy industrialists to share their wealth with the
poor and marginalised members of society. His aegis concept aided
socioeconomic growth. Companies and industries, according to Gandhi, were
the "temples of modern India." He persuaded industrialists to establish trusts
for colleges, research, and training institutions. These trusts were also active in
social reform initiatives such as rural development, education, and
empowerment.

Phase III: This period was marked by the emergence of PSUs (Public Sector
Undertakings) to ensure better wealth distribution in society. The policy on
industrial licencing and taxes, as well as restrictions on the private sector,
resulted in corporate malpractices, which prompted appropriate legislation on
corporate governance, labour, and environmental matters. Because the success
rate of PSUs was low, there was a natural shift in expectations from the public
to the private sector, with the latter becoming more involved in socioeconomic
development. In 1965, academics, politicians, and business leaders held a
nationwide workshop on CSR, with a focus on social accountability and
transparency.

Phase IV: CSR was characterised as a sustainable business strategy during this
final phase. The wave of liberalisation, privatisation, and globalisation (LPG),
combined with a comparatively relaxed licencing system, led to a boom in the
country's economic growth, which in turn led to an increased momentum in
industrial growth, allowing companies to contribute more towards social
responsibility. What began as charity is now recognised and accepted as
responsibility.

36
 CHAPTER-3
Importance of CSR, its Amendment and
Impact On Society and Businesses
This chapter includes some more details about the “Corporate Social Responsibility”
which includes the latest amendments that have been done in the recent years, the
notifications that have been made by the Government and the Ministry of Corporate
Affairs, the advantages, importance and the impact in the wake of COVID pandemic.

Chapter 3.1: CSR and its Advantages:

Corporate social responsibility (CSR) has sparked growing attention from the
business world and academic community. Businesses should pursue profits while
simultaneously fulfilling their social obligations to improve society, as this can help
them succeed financially. The interaction between business organisations and society
is known as corporate social responsibility. With particular reference to the current
pandemic scenario that has affected every country, the corporations have stepped up
to donate relief even over their designated CSR budget. Additionally, the businesses
have developed a number of inventive strategies, such as a new logo, tagline, or
commercials, to promote the virus prevention procedures.

A very simple understanding of the word ‘Corporate Social Responsibility’ (CSR) is

that it is a relationship between business organization and the society with which they
interact57. Corporations adopt CSR strategies to conduct their business in a way that is
society friendly, ethically and morally correct58.

Many businesses see CSR as an essential component of their brand image because
they think that consumers will be more willing to buy from companies they perceive
as being more ethical. In this regard, CSR initiatives can be a significant part of
57
Upadhyay, Niteesh Kumar & Rathee, Mahak. (2021). “AN ANALYSIS OF CORPORATE SOCIAL
RESPONSIBILITY IN INDIA WITH SPECIAL REFERENCE TO COVID-19 SITUATION”. 42-61.
58
Tamvada, M. “Corporate social responsibility and accountability: a new theoretical foundation for
regulating CSR”. Int J Corporate Soc Responsibility 5, 2 (2020). https://doi.org/10.1186/s40991-019-
0045-8
37
corporate PR. Additionally, some business founders are inspired to participate in CSR
because of their convictions.

Several fields have seen an impact from the CSR movement. As an illustration,
numerous businesses have implemented strategies to increase the environmental
sustainability of their operations, such as adding renewable energy sources or buying
carbon offsets. As part of controlling supply chains, initiatives have been made to end
the use of unethical labour practises like child labour and slavery.

Although large organisations have traditionally been the ones to implement CSR
programmes, small businesses can also engage in CSR through more modest
initiatives like making donations to neighbourhood charity and supporting regional
events.

Your success depends on your ability to act ethically and with social responsibility. A
startling 91 percent of customers worldwide, according to the 2015 Cone
Communications/Ebiquity Global CSR report59, expect firms to act responsibly to
solve social and environmental challenges. Additionally, 84 percent of respondents
claim that they look for ethical items wherever possible.

As evidenced by the numbers above, customers actively seek out goods from
companies that conduct business ethically as they become more conscious of the
value of social responsibility. CSR implies that your company cares about broader
societal concerns as well as those that have an influence on your profit margins,
which will draw clients who share your beliefs. As a result, conducting business
sustainably makes sense.

The following benefits of CSR are mentioned:

 This is important since customers consider your reputation when determining

whether to buy from you. Simple things like staff employees giving an hour a
week to a charity demonstrate your company's commitment to doing good. As
a result, consumers will view you considerably more favourably.

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2015 “Cone Communications/Ebiquity Global CSR Study” https://conecomm.com/2015-cone-
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 If you're dedicated to moral behaviour, word of this will get out. As a result,
your brand will become more well-known, raising brand awareness.
 Your production costs will go down, thanks to many easy environmental
measures, such utilising less packaging.
 You distinguish yourself from rivals in your sector by embracing CSR. By
taking social and environmental considerations into account, you position your
organisation as one that is dedicated to going above and beyond.
 You should announce your use of sustainable systems loud and clear. Create a
tale out of your efforts and post it on your social media platforms.
Additionally, you should showcase your work to regional media in the hopes
that they will cover it. Customers will pay attention to this and interact with
your brand and activities.
 Similar to consumer involvement, you should make sure your staff is aware of
your CSR initiatives. It has been demonstrated that workers prefer to work for
a company with a positive public image over one without. Furthermore, you'll
be far more likely to draw in and keep the best candidates if you demonstrate
your commitment to causes like human rights.
 When you embrace CSR, your employees might get a variety of advantages.
By encouraging activities like volunteering, you foster both personal and
professional development and make your company a more positive and
productive place to work.

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Chapter 3.2: Amendments that have been done Under CSR:
“Corporate Social Responsibility” (CSR) was first made a requirement for businesses
by Section 135 of the Companies Act of 2013. The “Companies (Corporate Social
Responsibility Policy) Rules” were subsequently published on February 27, 2014
("CSR Policy Rules, 2014")60 to set down the requirements and process that
businesses must adhere to when fulfilling their CSR commitments.

The CSR provision under Section 135 of the Companies Act underwent some
significant changes as a result of the Companies Amendment Acts of 2019 and 2020.
‘The Ministry of Corporate Affairs (MCA)’ announced the ‘Draft Companies
(Corporate Social Responsibility Policy) Amendment Rules’ in March 2020 ("Draft
Rules")61 and invited public opinions in order to make provisions for the notifiable
adjustments. The “Companies (Corporate Social Responsibility Policy) Amendment
Rules” (the "New Rules")62, which put into effect the amendments made to CSR by
the Companies Amendment Acts of 2019 and 2020, were recently released by the
MCA on January 22, 2021.

Important Modifications made by the 2021st amendment:

 Modifications in Definition Clause.

By defining new concepts like ‘Administrative Overheads’, ‘International
Organization’, and ‘Public Authority’, the New Rules have significantly altered
the definition clause of the CSR Policy Rules, 2014. The definitions of corporate
social responsibility and CSR policy have also undergone considerable revisions.
The following key modifications are discussed:
i) ‘Administrative Overheads’ Defined:
The most recent modification creates a new word, ‘Administrative
Overheads’, which is defined under Rule 2(b)63 and refers to costs incurred

60
CompaniesActNotification2_2014 Available at:
http://www.mca.gov.in/Ministry/pdf/CompaniesActNotification2_2014.pdf
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GOVERNMENT OF INDIA, MINISTRY OF CORPORATE AFFAIRS, NOTIFICATION
Available at: https://resource.cdn.icai.org/58749csr47857.pdf
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CSRAmendmentRules_23012021 Available at:
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 by the corporation for "general management and administration" in
relation to its CSR functions. The definition expressly states that
administrative overheads do not include costs actually expended for
planning, implementing, overseeing, and evaluating a specific CSR
activity.
According to MCA, “Administrative overheads are the expenses incurred
by the company for ‘general management and administration’ of CSR
functions. However, the expenses which are directly incurred for the
designing, implementation, monitoring, and evaluation of a particular CSR
project or programme, shall not be included in the administrative
overheads.”64
In general, administrative overheads include things like personnel costs,
utilities, office supplies, legal fees, etc. However, costs directly related to
the execution of the project must only be included in the project cost.
According to Rule 7(1)65 of the Draft Rules, “the board shall ensure that
the administrative overheads shall not exceed five percent of total CSR
expenditure of the company for the financial year”. In simple words the
Board must make sure that administrative costs related to CSR do not
amount more than 5% of the company's overall CSR spending. The Draft
Rules did not define what was meant by administrative overheads,
nevertheless. It is a positive step to provide the term in the New Rules a
definition because it gives the firms more clarity. For a clearer
understanding of the meaning and range of the term "administrative
overheads," we believe the government should additionally provide a few
instances of expenses that fall under this category.

ii) ‘CSR’ Defined:

According to the New Rules, Corporate Social Responsibility is now
referred to as actions carried out by a Company in accordance with its

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 CSR responsibility under the Companies Act under Section 2(d)66. The
additional actions listed below are not eligible under the modified rule for
a company's CSR requirement:
(a) Activities carried out in the course of the company's regular
business. Due to the COVID pandemic, a change to this rule was
made by MCA notification on August 24, 2020, allowing
businesses engaged in the routine research and development of new
drugs, vaccines, and medical devices to fulfil their CSR obligations
for three fiscal years by conducting such research and development
in relation to COVID-19 (from 2020 to 2023). The following
requirements have been fully met for this exception to be included
in the New Rules:
(i) “Such research and development activities shall be carried out
in collaboration with any of the institutes or organisations
mentioned in item (ix) of Schedule VII to the Act”;
(ii) “Details of such activity shall be disclosed separately in the
Annual report on CSR included in the Board’s Report”;
(b) Except for training athletes who will represent any State, Union
territory, or India on the international stage, no activity carried out
by the corporation outside of India shall be deemed to be CSR;
(c) “Contribution of any amount directly or indirectly to any political
party under section 182 of the Act”;
(d) Activities that assist the company's employees as described in
section 2 clause (k) of the 2019 Code on Wages (29 of 2019);
(e) Sponsored events that the businesses promote in order to gain
marketing advantages for their goods or services;
(f) actions taken to fulfil any additional statutory requirements under
any applicable Indian legislation;
iii) ‘CSR Policy’ Defined:

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 The term ‘CSR Policy’ is now defined in Rule 2(f) 67 which means
“statement containing the approach and direction given by the board of a
company, taking into account the recommendations of its CSR Committee,
and includes guiding principles for selection, implementation and
monitoring of activities as well as formulation of the annual action plan”.
Simply it means a statement that outlines how a company's board of
directors intends to proceed, taking into account the committee's
recommendations. The definition also includes guiding principles for the
selection, implementation, and monitoring of activities as well as the
creation of an annual action plan.

The New Rules are more thorough since they go into more information
about the CSR Policy formulation process. The relevant clause was
previously found in Rule 6 of the CSR Policy Rules, 2014, which stated
that CSR projects' execution modalities and implementation schedules
should be included in the CSR Policy. However, neither the procedure for
developing the CSR Policy nor the individuals in charge of it were
specified.
iv) ‘International Organisation’ Defined:
Rule 2(g)68 of the CSR Rules 2021 defines ‘International Organisation’ as
“an organisation notified by the Central Government as an international
organisation under section 3 of the United Nations (Privileges and
Immunities) Act, 1947 (46 of 1947), to which the provisions of the
Schedule to the said Act apply”.
Under the direction of Injeti Srinivas, “the High Level Committee
("HLC") on Corporate Social Responsibility for 2018 had advocated
including international organisations in India's CSR framework”69. 4 In
accordance with Rule 4(3) of the New Rules, the advice allowing
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 businesses to work with international organisations on their CSR projects'
planning, monitoring, and evaluation as well as helping them develop the
skills of their employees has been properly adopted.

It should be noted that the Draft Rules also called for the participation of
international organisations in the implementation of CSR projects, but the
New Rules make no mention of this.

v) ‘Ongoing Project’ Defined:

‘Ongoing Project’ is defined under Rule 2(i)70 as “a multi-year project
undertaken by a Company in fulfilment of its CSR obligation having
timelines not exceeding three years excluding the financial year in which it
was commenced, and shall include such project that was initially not
approved as a multi-year project but whose duration has been extended
beyond one year by the board based on reasonable justification”.
The phrase ‘Ongoing Project’, which was used inferentially under the CSR
Policy Rules 2014, has now been defined as a multi-year project carried
out by a corporation in fulfilment of its CSR commitment, with a four-year
maximum allowable duration (three years excluding the year of
commencement as mentioned in the New Rules). The term also covers
initiatives that weren't at first designated as multi-year but were later given
a justified extension beyond a year by the Board.
Companies have additional duties associated with ongoing projects, such
as the need to oversee their execution in accordance with authorised
timetables under Rule 4(6) of the New Rules. The attempt to describe
ongoing projects is undoubtedly a positive move, but there is still
uncertainty regarding projects whose implementation exceeds the four-
year time limit. According to the current regulations, businesses may not
be able to carry out these projects as part of their CSR activity because
they would not qualify as ongoing projects, and any unused funds in this

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 regard would be transferred automatically to the Fund listed in Schedule
VII as required by Section 135(5) of the Companies Act.

vi) ‘Public Authority’ Defined:

The term ‘Public Authority’ means ‘Public Authority’ as defined in
Section 2(h)71 of the Right to Information Act (RTI Act), 2005, under
Section 2(j)72. Any authority, body, or institution of self-government
established by (a) the Constitution; (b) any other law made by Parliament;
(c) any other law made by State Legislature; (d) notification issued or
order made by the appropriate Government, has been defined as a Public
Authority under the RTI Act. This definition includes any— I body
owned, controlled, or substantially financed; and (ii) non-Government
organisation substantially financed, directly or indirectly, by funds
provided by the government.

 Modifications in Rule 4- ‘CSR Implementation’73.

The heading ‘CSR Activities’ Under Rule 4 of the CSR Policy 2014 has been
changed to ‘CSR Implementation’ in the new Amendment Rule 2021. According
to the New Rules, a company may implement its CSR either directly or through
another company created in accordance with Section 8 of the Companies Act, a
registered public trust, or a registered society created (i) either by the company
directly or (ii) by the Central Government or State Government. In addition to the
aforementioned, a company may also enlist the assistance of (i) any organisation
created by a law passed by the federal government or a state legislature, or (ii) a
Section 8 company, registered public trust, or registered society that is not
mentioned above but has a track record that has lasted for at least three years in
order to implement CSR.

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 It should be noted that the original CSR Policy Rule 2014 contained references to
registered public trusts and societies for CSR implementation, but the Draft Rules
did not. Public trusts and societies have now been properly mentioned as
permitted implementing agencies under the New Rules after the stakeholders
objected to such an omission. This action is welcomed since it allows businesses
access to a larger selection of organisations to meet their CSR commitments.
Additionally, starting on April 1, 2021, the New Rules mandate that all such
implementing entities planning to engage in CSR activities register themselves
with the Central Government by submitting form CSR-1 electronically. All
businesses filing Form CSR-1 must produce a distinct CSR Registration Number.
The MCA keeps a record of all such cooperating entities in this fashion,
increasing the likelihood that requested actions will be completed on time. The
firms can consult this historical performance history of the implementing agency
to help them select their engagement for upcoming CSR activities.
The Board must confirm that the monies are being used for the reasons it has
approved under New Rule 4(5). If a project is already underway, the Board must
keep track of how it is being carried out in light of the agreed schedule and annual
budget. In order to ensure a seamless implementation, the Board has also been
given the authority to make changes.

 Modifications in Rule 5- ‘CSR Committees’74.

“The CSR Committee shall formulate and recommend to the Board, an annual
action plan in pursuance of its CSR policy”, which shall include the following,
namely:
(a) “the list of CSR projects or programmes that are approved to be undertaken in
areas or subjects specified in Schedule VII of the Act”;

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 (b) “the manner of execution of such projects or programmes as specified in sub-
rule (1) of rule 4”;
(c) “the modalities of utilisation of funds and implementation schedules for the
projects or programmes”;
(d) “monitoring and reporting mechanism for the projects or programmes; and
(e) “details of need and impact assessment, if any, for the projects undertaken by
the company”;
“Provided that Board may alter such plan at any time during the financial year, as
per the recommendation of its CSR Committee, based on the reasonable
justification to that effect.”
The New Rules are extremely thorough when compared to the original CSR
Policy Rules 2014 clause on CSR Committees. The previous Rule 5 of the CSR
Policy Rules 2014 made a vague reference to establishing a transparent
monitoring mechanism for CSR implementation without outlining its
specifications. By outlining everything that must be included by the company in
its action plan, the New Rules simplify the process.

 Modifications in Rule 7- ‘CSR Expenditure’75.

As per the modified Rule 7, the Board is responsible for ensuring that
administrative costs associated with CSR do not exceed 5% of the company's
overall CSR spending. It should be noted that the Draft Rules had a ten percent
cap on administrative costs for businesses conducting impact assessments, but the
2021 revision omitted this provision. Instead, enterprises doing impact
assessments are now able to deduct 5% of their overall CSR spending or 50 lakh
rupees, whichever is less, as a CSR expense under Rule 8(3)(c) of the New Rules.
The New Rules also make it clear that any surplus from CSR activities shall not
be regarded as business profit and; 
(i) ‘must be I invested back into the same project’, 
(ii) ‘transferred to the Unspent CSR Account’, or 

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 (iii) ‘transferred to a Fund listed in Schedule VII within six months of the end of
the financial year’.

The CSR amount may also be used by a company to create or purchase a capital
asset owned by one of the following:
(a) ‘a company established in accordance with Section 8 of the Act’;
(b) ‘a registered public trust’;
(c) ‘a registered society with charitable objectives’;
(d) ‘beneficiaries of the said CSR project, in the form of self-help groups,
collectives, entities’; or
(e) ‘a public authority’.

The New Rules also permit a company to set off any excess amount spent by it in 
relation to its CSR requirements up to the immediately succeeding three financial 
years subject to the following:
“The excess amount for set off shall not include the surplus arising out of CSR
activities in accordance with sub-rule (2)”; and
“The Board shall pass a resolution to that effect”.

It is beneficial to include such a clause since it allows businesses the option of

using leftover money from prior years to pay for upcoming responsibilities.
The purpose of enabling businesses to use the CSR amount for capital
development or acquisition, as highlighted in the Report76 of the High Level
Committee on Corporate Social Responsibility 2018, is to promote sustainable
and successful activities. The goal is to use CSR funds to build capital assets
rather than limiting them to revenue-related costs so they can be used in the future
to generate income.

 Modifications in Rule 8- ‘CSR Reporting’77.

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 The New Rules have included Rule 8(3), which requires enterprises with average
CSR obligations of ten crore rupees or more over the three most recent financial
years to conduct impact assessments of their CSR programmes through an
independent agency. The impact assessment reports must be presented to the
Board and included to the yearly CSR report. A company conducting an impact
assessment is permitted to record corporate social responsibility expenses for that
fiscal year as long as they don't exceed 5% of the overall CSR expenses or
$50,000, whichever is less.
Companies who meet the aforementioned criteria will therefore be mandated to
conduct an impact assessment of their CSR contributions after the notification of
the New Rules. It is envisaged that such a mandate will lead to more significant
social contributions from businesses. However, there is room for clarification with
regard to the clause allowing businesses to deduct 5% of CSR expenses for impact
evaluation. On the surface, it appears that these businesses have the opportunity to
claim a total of ten percent as their CSR spend - five percent for administrative
costs and five percent for effect evaluation. However, it hasn't been stated openly
in such plain terms. This ambiguity can be resolved by a statement from the
government in this regard.

 Modifications in Rule 9- ‘Display of CSR activities on website’.

Rule 9 of the Amendment 2021 says that, “The Board of Directors of the
Company shall mandatorily disclose the composition of the CSR Committee, and
CSR Policy and Projects approved by the Board on their website, if any, for public
access”78.
The Board is required by Rule 9 of the New Rules to post the members of the
CSR Committee, the CSR Policy, and the Projects on their website for public
viewing. This clause is comparable to Rule 9 from the CSR Policy Rules of 2014.
To enable the public to make educated judgments, it is crucial to require
businesses to reveal their CSR initiatives and societal contributions. Investors

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 today are growing more socially conscious and want to work with businesses that
contribute to society's advancement.

 Modifications in Rule 10- ‘Transfer of Unspent CSR amount’.

Rule 10 of the Amendment 2021 provides that, “Until a fund is specified in
Schedule VII for the purposes of subsection (5) and (6) of section 135 of the Act,
the unspent CSR amount, if any, shall be transferred by the company to any fund
included in schedule VII of the Act”79.
The 2021 Amendment added a New Rule 10 requiring corporations to transfer any
fund currently indicated under Schedule VII80 with the unspent CSR amount until
"the Fund," as mentioned in Sections 135(5) and 135(6) of the Companies Act of
2013, is established or designated.
For the purposes of Sections 135(5) and 135(6) of the Companies Act, it should be
noted that the Draft Rules suggested the formation of a National Unspent CSR
Fund by the Central Government ("the Fund"). However, there hasn't been any
mention of any such designated central fund that the Central Government is
supposed to establish in accordance with the New Rules of 2021.

The remaining unspent CSR funds at the end of financial year must have to be
utilised in the following ways:
i. ‘Transfer to an Unspent CSR Account’: Within 30 days of the financial
year's end, any unused funds from an existing project should be transferred
to the company's newly created "Unspent Corporate Social Responsibility
Account," which will be properly designated. According to the company's
CSR policy, these funds must be used within the following three fiscal
years. If these funds are not used after the three years have passed, they
must be transferred, within 30 days of the third fiscal year's end, to one of
the funds listed in Schedule VII of the Act (such as the PM National Relief
Fund, PM CARES Fund, Disaster Management Fund, Clean Ganga Fund,
and so on).
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CSR Provisions and Schedule VII of Companies Act, 2013.
50
 ii. ‘Transfer to a Schedule VII fund’: If the money isn't used for a CSR
project, it must be moved, within six months of the fiscal year's end, to one
of the funds listed in Schedule VII of the act.

If there are any surplus funds, it must be;

a. applied to the same project that generated the surplus, or
b. transferred to the company's Unspent CSR Account, or
c. transferred to one of the funds listed in Schedule VII81 of the Act.

‘Excess CSR spends’:

According to MCA, “The excess amount can be set off against the required 2%
CSR expenditure up to the immediately succeeding three financial years subject to
compliance with the conditions stipulated under rule 7(3) of the Companies (CSR
Policy) Rules, 2014. This position is applicable from 22nd January, 2021 and has
a prospective effect. Thus, no carry forward shall be allowed for the excess
amount spent, if any, in financial years prior to FY 2020-21.”82
If a business spends more on CSR than the required two percent, it may deduct
those extra costs from its CSR budget for the next three fiscal years. However, a
resolution must be approved by the board of directors for this. It's vital to
remember that the surplus from CSR efforts cannot be included in such excess
quantities. For example, any interest gained on assets purchased with CSR funds
would be recognised as a surplus and could not be deducted from the CSR budget
for the next year.

India's CSR framework has been updated by the Companies (CSR Policy)
Amendment Rules 2021. The “Companies Amendment Act of 2019” (concerning
transfer of unspent CSR amount) and the “Companies Amendment Act of 2020”
(concerning setting off of excess CSR expenditure) not only gave effect to changes
made to Section 135 of the Companies Act, but also introduced new requirements like

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impact assessments of CSR contributions, engagement of international organisations
for ‘CSR Projects’ in a limited capacity, etc. The requirements in the ‘New Rules’
appear to be more structured and thorough, even in relation to earlier concepts
included in the 2014 Rules, such as the definition of ‘CSR’, ‘CSR Policy’, and ‘CSR
Implementation’. The main concept behind the amendment is to introduce the
provisions in order to have a smooth functioning of the CSR Policies and to introduce
policies to tackle the COVID pandemic. Rule 2(d)(i) 83 specially deals with the
provision regarding CSR policies relating to COVID 19.

This is applauded as it has effectively reduced the excessive discretion in the hands of
a corporation, improved clarity, and brought some uniformity by laying down the
rules to be followed in some respects. Some provisions are still a little hazy, such as
‘Rule 10’ of the New Rules, which refers to the transfer of unused ‘CSR funds’ to
those listed in Schedule VII84 but skips over the issue of creating a new Fund for the
purposes of ‘Sections 135(5) and 135(6)’ of the ‘Companies Act’, which was raised in
the 2020 ‘Draft Rules of Procedure’. The New Rules' 5% administrative overhead cap
has also drawn criticism, and businesses may find it challenging to comply with such
rules.

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“The Companies (Amendment) Act”, 2019
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Chapter 3.3: Why Businesses Need to Invest in CSR Activities:
The stakeholders in business organisations expect them to do more than only
generating riches for themselves, which is the solution for this question. Numerous
businesses concur with this viewpoint. A noteworthy quote can be found in the words
of Mr. Dave Packard, a co-founder of Hewlett-Packard;

“I think that many people assume, wrongly, that a company exists purely to
make money. While this is an important result of a company’s existence, we
have to go deeper and find the real reasons for our being. As we investigate
this, we inevitably conclude that a group of people get together and exist as an
institution that we call a company so that they are able to accomplish
something collectively that they could not accomplish separately-they make a
contribution to society, a phrase which sounds trite but is fundamental”85.

CSR is a hotly disputed subject that is simple to understand but difficult to describe.
Depending on the viewpoint, its definition can alter and is highly broad and fluid.
There isn't a perfect CSR definition that everyone can agree on. Further complicating
the issue of defining CSR is the widespread dispute on what constitutes CSR, what
responsibilities it encompasses, what justifies CSR, and whether the notion that
corporations have any sort of social duty at all makes sense86.

The business cultures of the ancient Chinese, Sumerians, Egyptians, and Islamic
Society are where the entire CSR notion first emerged. Both the advancement of their
businesses and the wellbeing of society at large were subject to the regulations
established by these communities87.

Wealth increases greed and selfishness and doesn't lead to true happiness, according
to the lessons learned from Jesus 88. Similar to the Zakah principle, which is one of the

85
Upadhyay, Niteesh Kumar & Rathee, Mahak. (2021). “AN ANALYSIS OF CORPORATE SOCIAL
RESPONSIBILITY IN INDIA WITH SPECIAL REFERENCE TO COVID-19 SITUATION”. 42-61.
86
Ibid.
87
Ibid.
88
Christian Beliefs on Religion, Wealth and Poverty, https://www.123helpme.com/essay/Christian-
Beliefs-on-Religion-Wealth-and-Poverty-122236
53
cornerstones of Islam, it has been stated that if a Muslim has Nisab, they are required
to give Zakah to the poor and those in need89.

Nearly 70% of employees, according to Harvard Business School, said they would not
work for a company without a clear mission. Ninety percent of employees say they
are more inspired, motivated, and devoted to their employers when they work for
organisations with a clear sense of purpose, and 92 percent of employees who work
for socially conscious businesses say they are more likely to recommend their
employer to people in their network who are looking for work90.

Employee engagement, according to study, has a direct impact on a company's overall

performance and bottom line. For example, engaged workers create 17 percent more
work, are 21 percent more lucrative, and have absence rates that can be 41 percent
lower.91.

According to research, 87 percent of American customers are more inclined to

purchase a product from a company that promotes a cause they are interested in, and
76 percent would refrain from doing so if they learned that the company backed a
cause that went against their personal values92.

Additionally, community-focused businesses frequently have an advantage over rivals

due to stronger brand perception. For instance, Elon Musk, CEO of Tesla Inc.
(TSLA), has had success luring environmentally conscious customers to his range of
cutting-edge electric vehicles and eco-friendly automobile items93.

The goal of CSR, to put it simply, is to create a balance between a company's desire to
maximise profits and its responsibility to act as a force for good in the world 94. Carroll
89
Salma Taman, “The Concept of Corporate Social Responsibility in Islamic Law”, 21 IND. INT'L &
COMP. L. REV. 481, 488 (2011).
90
Harvard Business School. “15 Eye-Opening Corporate Social Responsibility Statistics”,
https://online.hbs.edu/blog/post/corporate-social-responsibility-statistics
91
Cone. “AMERICANS WILLING TO BUY OR BOYCOTT COMPANIES BASED ON
CORPORATE VALUES, ACCORDING TO NEW RESEARCH BY CONE COMMUNICATIONS”,
https://conecomm.com/2017-5-15-americans-willing-to-buy-or-boycott-companies-based-on-
corporate-values-according-to-new-research-by-cone-communications/
92
Ibid.
93
Tesla. ‘Elon Musk’ https://www.tesla.com/elon-musk
94
BOEGER NINA, RACHEL MURRY & VILLERS CHARLOTTE, PERSPECTIVE ON
CORPORATE SOCIAL RESPONSIBILITY 9 (Edward Elgar Publishing, 2008); see also KRISHNA
C. GOPALA, CORPORATE SOCIAL RESPONSIBILITY IN INDIA 58-63 (Mittal Publication,
1992).
54
and Buchholtz define “Corporate Social Responsibility” as the "economic, legal,
ethical, and discretionary expectations that society has of organizations at a given
point in time". This concept, which can be found in different CSR debates and
disclosures, is one of the widely accepted definitions of CSR.

Before CSR was mandated by the Companies Act of 2013, there were numerous
voluntary provisions in India as well, such as the Corporate Social Responsibility
Voluntary Guidelines 200995, which were published by the Ministry of Corporate
Affairs in December 2009, the Guidelines of Corporate Social Responsibility for
Central Public Sector Enterprises (2010)96, and “Corporate Social Responsibility”,
“Sustainable Development” and “Non-Financial Reporting – Role of Banks”97.

Even if the Companies Act of 2013 contains a number of CSR-related regulations and
investment requirements, the spread of the pandemic has caused businesses to step up
and contribute even more than they had planned. The entire Covid-19 has affected the
world economy, and at this moment, businesses have not only stepped forward to
donate money but have also developed a number of creative techniques to encourage
social isolation, sanitization, and other positive behaviours.

95
“National Voluntary Guidelines on Social, Environmental and Economic Responsibility of Business”
https://www.mca.gov.in/Ministry/latestnews/National_Voluntary_Guidelines_2011_12jul2011.pdf
96
“Guideline on Corporate Social Responsibility For Centra Public Sector Enterprises”
https://dpe.gov.in/sites/default/files/Corporate_Social_Responsibility_Sustainability-Chapter-12.pdf
97
“Corporate Social Responsibility, Sustainable Development and Non-Financial Reporting – Role of
Banks” (2007) https://rbidocs.rbi.org.in/rdocs/notification/PDFs/82186.pdf
55
Chapter 3.4: CSR 2021 amendment rules' effects on businesses in the wake
of the COVID-19 epidemic:

The MCA introduced changes to the current CSR policy because CSR can be
extremely important during the pandemic. Additionally, the government is making an
effort and urging companies to provide social support throughout the pandemic. The
new strategy encourages businesses to use their resources to address many societal
issues, such as the pandemic's effects on hunger and poverty. Therefore, the
corporates applauded this initiative to broaden the scope of CSR efforts.

Following the government's announcement that donations made to combat COVID-19

will be counted as CSR, the majority of businesses gave to the PM Cares Fund or
other organisations that assisted the affected population in recovering as well as those
in need. For example, Ambuja Cements and ACC donated a combined 3.3 crore to
three non-profit organisations to assist migrant workers and daily wage workers who
have been experiencing the majority of issues as a result of lockdowns98.

The ministry of corporate affairs (MCA) has repeatedly clarified what businesses may
take into account as part of their CSR expenditure in light of the urgent new
healthcare needs that have arisen as India pushes over four lakh Covid-19 cases every
day. The most recent was on May 5, when it was revealed that businesses could use
CSR funds for “building health infrastructure for Covid-19 care, establishing medical
oxygen and storage plants, manufacturing and supplying oxygen concentrators,
ventilators, cylinders, and other medical equipment to counter Covid-19”.

The amount spent on CSR in India for FY20 is Rs 17,885 crore, down from Rs 18,655
crore the year before. According to Dasra and Bain & Company's India Philanthropy
Report 2021, CSR makes up 28% of all charitable donations made in India, however
it is predicted to decrease by 5% this year.99 “Domestic corporations' profitability has
dropped during the past year. According to the report, listed companies' profitability
fell by 62 percent in the months following India's initial Covid-19 lockdowns. It also
98
Ambuja Cement, ACC give Rs. 3.3 Cr. to NGOs working on Covid relief, Business Line,
https://www.thehindubusinessline.com/companies/ambuja-cement-acc-give-33-cr-to-ngos-working-on-
covid-relief/article31441870.ece
99
Inside the reshaping of CSR in India during Covid-19, https://www.forbesindia.com/article/take-
one-big-story-of-the-day/inside-the-reshaping-of-csr-in-india-during-covid19/67821/1
56
notes that the shift away from other traditional funding areas (like education, rural
development, environment, etc.) in favour of Covid-19 relief will make the challenge
faced by the social sector even more difficult.”100

Bharat Vasani, corporate partner at law firm Cyril Amarchand says that, “Currently,
companies are just worried about impact on their profits due to lockdowns in various
parts of the country and lasting impacts of the second wave of the pandemic. But
during this time, the entire nature of CSR has undergone a fundamental change”101. He
argues that the new Rules, which are very different from the social responsibility
legislation that was initially optional for businesses, dispense substantial punishment
for non-compliance. The new Rules mandate more stringent requirements for the
Board and CSR Committees of corporations to track and report on CSR efforts
through yearly action plans, but they also call for the CFO's certification of cash
disbursement and utilisation.

Vasani also says that, “So if companies acquire movable or immovable assets like
ambulances or construction of school buildings, for example, they have to transfer it
to the CSR entity within six months. A lot of companies are concerned as they do not
have their own CSR Foundations and partner with [third-party] NGOs that do their
CSR activities”.

As they carry out CSR initiatives this year, businesses and charities may find it
difficult to comply with more Rules amendments. One of them says that unspent
funds must be transferred within certain timeframes to a designated "Unspent CSR
account" or to a fund listed in Schedule VII of the Companies Act. In the view of
Aakash Sethi, CEO, Quest Alliance, “This creates a lot more pressure on spending as
opposed to using it judiciously”.

Sethi further notes that, due to the Amendments corporate donation cycles are likely
to be reorganised this year in accordance with the NGO budgeting cycle, which runs
from April to March. He says, “Grant cycles varied from company to company. For
some it was August to July, for some December to March. So, it was a nightmare to

100
Inside the reshaping of CSR in India during Covid-19, https://www.forbesindia.com/article/take-
one-big-story-of-the-day/inside-the-reshaping-of-csr-in-india-during-covid19/67821/1
101
Bharat Vasani, Cyril Amarchand Mangaldas, India Corporate Law, Bharat Vasani
57
keep track of funds and budget for them. We used to juggle with reporting deadlines
and timelines, which would be different for different funders. With the amendment, it
is likely that the grant cycle will stick to the April-March cycle, which will help us get
a realistic estimate of fund inflow and outflow, plan better, and streamline review and
reporting.”.

According to Sudha Murty, chair person of the Infosys Foundation, expenditures for
the upcoming fiscal year will be prioritised around Covid-19 relief, followed by the
building of infrastructure for the Bengaluru Metro, as the project has received
approval from the Karnataka state government and provides employment for many
people. She added, “Out of our Rs 275 crore budget, we are spending Rs 90 crore on
Covid-19 this year. This can increase depending on the situation. Our first priority is
Covid relief… we adjust [focus among causes] and keep adapting. The Foundation
had allocated Rs 110 crore to Covid relief last year, taking the total Covid-related
contribution to Rs 200 crore over the past two years.”102

In addition to opening a 50-bed Covid hospital in Bengaluru in the year 2020, Murty
claims that the company is now supplying ventilators, oxygen concentrators, PPE kits,
and masks to help the nation's healthcare system. In addition to promoting vaccination
awareness campaigns to reduce vaccine reluctance, the Foundation also provides food
kits for construction workers.

In response to a question about how to assess the influence of CSR on pandemics,

Sudha Murthy noted that, “A mother will ask her child to put on a sweater if she is
feeling cold. That is how we view poverty in our society. We might believe that
others are benefiting when we work on a project and they ask for our assistance, but is
this truly what they want? Since this year, when we conduct our impact assessment,
we have started assessing the recipients' satisfaction index to determine if they are
truly satisfied with what we have done for them.”103

Companies are also attempting to adjust their operational policies in accordance with
the framework of the new CSR Rules that the MCA announced in January. These

102
“CSR funding came as a boon”, by Sudha Murthy, Chair Person, Infosis Foundation
https://www.infosys.com/infosys-foundation/newsroom/documents/csr-funding-came-boon-to-us.pdf
103
Ibid.
58
rules have made substantial changes to the monitoring and evaluation of CSR
activities as well as the utilisation of CSR expenditure.

According to an article of Forbes India, “Profitable businesses must devote at least

2% of their annual net income, which is the average of the previous three years, to
CSR initiatives, according to the regulations. As a result of the pandemic, the idea that
CSR is all about writing checks has been called into question. Businesses have to
work with other stakeholders to satisfy the needs of the more vulnerable populations
within their ecosystem. Additionally, this indicates that this year's emphasis on
financial innovation is more intense.”104

Employers in the social sector are adapting. As a result of the Covid situation in India
and the rate of vaccinations, according to Santanu Mishra, co-founder of the Smile
Foundation in Delhi, “corporates will continue to prioritise their activities in and
around Covid-19 for at least the next one year or so, so whatever you are doing has to
be Covid-complaint.” In order for even non-health related causes to continue without
interruption despite the pandemic, he explains, NGOs will need to re-evaluate the
definition and scope of their procedures. “For instance, as part of our livelihood
initiative, we were supplying labour to the retail and services sectors, both of which
are based on the real world. We have overhauled it over the last six months, and now
it has e-verticals,” he claims.105

In 2021, a lot of businesses that engage on long-term initiatives and causes are
attempting to find a balance. The company has been active in terms of Covid relief
work, according to Manoj Balachandran, head of CSR at IBM India. “Examples of
this activity include partnerships with local NGOs or staff involvement in pandemic-
related activities. However, the emphasis is maintained on educational skill
development as well, on which about 95% of the company's current CSR programmes
are built. He claims that they are attempting a different strategy for CSR. We are

104
“Inside the reshaping of CSR in India during Covid-19”, https://www.forbesindia.com/article/take-
one-big-story-of-the-day/inside-the-reshaping-of-csr-in-india-during-covid19/67821/1
105
Santanu Mishra, Co-founder of Smile Foundation, “Inside the reshaping of CSR in India during
Covid-19”; https://www.smilefoundationindia.org/Media/forbesindia-may-6-2021.html
59
changing what we expect from the programmes, and how we go about it will also alter
as new needs on the ground arise,” said Manoj Balachandran.106

For example, face-to-face contacts used to be a big part of IBM India's flagship
programme, STEM For Girls. However, “the corporation established agreements with
the government and other stakeholders throughout the pandemic to bring the
procedures online. Partnerships are crucial in these circumstances, since they enable
students to contact more people across the nation,” he added.107

He thinks that the updated CSR Rules make it clearer what is expected of businesses.
“Up until last year, even if you didn't spend on CSR outlays, you had the chance to
explain why; nevertheless, this year, spending is required. Additionally, they are
making sure you have an annual action plan, which will aid in your having an
organised approach to your programmes and deployments.”108

Two additional issues further exacerbate the challenges faced by new, small, and
medium-sized NGOs: Starting with the most recent changes to the Foreign
Contribution (Regulations Act), 2010, which forbid the regranting or transfer of
FCRA monies from one organisation to another. Many grassroots organisations that
are smaller in size obtain money from larger NGOs rather than from foreign donors
directly. Secondly, the funding for PM Cares, medical crises, and Covid-relief has
mostly been diverted from traditional areas like education, livelihood, and rural
development.109

106
Interview: “Manoj Balachandran, Head – CSR, IBM India & South Asia”
https://indiacsr.in/interview-manoj-balachandran-head-csr-ibm-india-south-asia/
107
Ibid.
108
Ibid.
109
“Inside the reshaping of CSR in India during Covid-19”, https://www.forbesindia.com/article/take-
one-big-story-of-the-day/inside-the-reshaping-of-csr-in-india-during-covid19/67821/1

60
 CHAPTER-4
CONCLUSION AND SUGGESTIONS
The conclusion and the suggestions derived from the study is discussed in this
chapter. The research work here examines and analyses the CSR 21 st Amendment in
context with the pandemic situation. It assesses the impact of COVID 19 over
corporate sector in the way of its CSR activities and how does the new rules have
helped or impacted the society to and the corporate sectors in their CSR expenditure.
By examining reports from various business organisations as well as reports and
notifications from the Ministry of Corporate Affairs, we have come to the following
conclusions and derived some suggestions regarding the 21st Amendment of the CSR
Rules and future amendments that must be made in accordance with any potential
pandemic situation. In this chapter, the findings are organised into three sections:

 The Major Research Findings,

 The Contribution of the Research, and
 The Future Scope of the Study.

Chapter 4.1: The Major Research Findings:

 Objective 1: To analyse CSR and its 2021st Amendment:

The analysis of CSR and its 21st Amendment has clarified the importance of CSR
Policies in the society. India's CSR framework has been updated by the
Companies (CSR Policy) Amendment Rules 2021. The Companies Amendment
Act of 2019 (concerning transfer of unspent CSR amount) and the Companies
Amendment Act of 2020 (concerning setting off of excess CSR expenditure) not
only gave effect to changes made to Section 135 of the Companies Act, but also
introduced new requirements like impact assessments of CSR contributions,
engagement of international organisations for CSR Projects in a limited capacity,
etc. Even with regard to prior principles included in the 2014 Rules, such as the

61
 definition of CSR, CSR policy, and CSR implementation, the New Rules'
provisions seem to be more structured and thorough.

No longer is the phrase "corporate social responsibility" used synonymously with

"philanthropy," which is the practise of setting aside a portion of one's income to
aid the underprivileged. Many considerations go into determining how to align the
goals and objectives with CSR, which includes community development,
sustainable development, environmental friendliness, etc.; the amount of funding
to be allocated to CSR; how to publicise the same in a subtle yet powerful manner
for brand building; growing the customer base; increasing stakeholder
satisfaction; etc.; and the recruitment in the CSR field to ensure that the
organisation is responsive to social issues, on its long-term and short-term CSR
investment and to gauge the same using the major CSR benefits, such as
competitive advantage, a powerful brand identity, a devoted following of
customers, etc.

This is valued because it has decreased the excessive discretion held by a

corporation, improved clarity, and added some uniformity by outlining the
processes to be followed in specific situations. Some provisions remain a little
ambiguous, such as Rule 10 of the New Rules, which refers to the transfer of
unused CSR funds to those already listed in Schedule VII but skips over the issue
of creating a new Fund for the purposes of Sections 135(5) and 135(6) of the
Companies Act, which was raised in the 2020 ‘Draft Rules’. Concerns have also
been expressed about the New Rules' five percent limit on administrative
overheads, which businesses may find challenging to follow. The New Rules
present a positive picture of India's CSR framework when taking into account the
overall plan and the motivation at play.

 Objective 2: To evaluate the effectiveness of the CSR Amendment 2021 during the
pandemic:
The coronavirus epidemic has a significant influence on our way of life and
thought.  Businesses and organisations made contributions of time and money to
deal with the effects, following the idea of their social responsibility within
society, of the epidemic. The result the future will examine of the many CSR
62
 practises. The magnitude of CSR in a significant global crisis is an opportunity to
deepen our comprehension and insights on the most effective strategies for
businesses to develop and implement their social responsibilities.
Despite the fact that we would have been better off without the coronavirus
epidemic, it gave us the chance to carefully consider social responsibility
measures. The scenario served as a magnifying glass to analyse CSR in its basic
sense, rather than as a "good to have" or public relations campaign, even while
firms' efforts were being stretched to the absolute limit.
Together with Section 135 of the Act, the new CSR Rules establish a rigid
regulatory framework for CSR activities in India. To ensure compliance with the
new regulatory framework, businesses must maintain thorough records of CSR
Committee meetings, CSR budget allocations, and initiatives carried out through
implementing partners.
The original CSR requirement under Section 135 was built on the "comply or
explain" principle, according to which a firm could either participate in CSR
activities or provide an explanation for why it had not spent the required amount.
The voluntary nature of Section 135 compliance was intended by the legislature.
There has been a complete change away from the initial goal over the course of
seven years. With the release of the new CSR Rules, the switch from the "comply
or explain" system is now complete. There is a widespread perception among the
corporate community that the new system has become unduly prescriptive.
The risk of diminishing is decreased by CSR initiatives for businesses. Enron,
WorldCom, the Satyam Scam, and other prominent cases where commercial
organisations depleted all of their resources as a result of their operations are
examples, we may look to. If any commercial firm engages in any sort of
unethical social behaviour, the value of its shares drops off very quickly.110
 Objective 3: The extent to which the CSR policies need to be modified going
forward:
The 21st Amendment to the CSR is not retroactive in nature. The adjustments will
still have an impact on events or actions in FY 20-21, though, therefore this does

110
Upadhyay, Niteesh Kumar & Rathee, Mahak. (2021). “AN ANALYSIS OF CORPORATE SOCIAL
RESPONSIBILITY IN INDIA WITH SPECIAL REFERENCE TO COVID-19 SITUATION”. 42-61.
63
 not imply that they won't. The modifications might, for instance, make up for any
budget shortfalls in FY 2020–21. Furthermore, there is a strong belief that CSR
projects carried out in prior years would even necessitate an effect evaluation.
According to the CSR changes made under the Act, businesses must now deposit
any CSR funds that have not yet been used into a fund specified in Schedule VII
of the Act111 by the end of the fiscal year. If the money is not used within three
years of the transfer date, they must be put into one of the designated funds. The
new law stipulates that in the event of non-compliance, both a monetary fine and
jail are required. The penalty is between INR 50,000 and INR 25 lakh, and the
company's defaulting official may face up to three years in prison, a fine of up to
INR 5 lakh, or both.
The sector, however, protested to the stringent restrictions, particularly with
regard to the jail terms for CSR infractions, and the government is currently
studying these regulations before they can be put into effect.
The provisions of Section 135 when combined with Schedule VII of the Act 112 and
‘Enterprises (CSR Policy) Rules’, 2014, give a wide framework within which
eligible companies are expected to develop their CSR policies, including the
activities to be carried out and implementation of the same. The company's Board
is given the authority to plan, approve, carry out, and monitor the company's CSR
activities based on the recommendations of its CSR Committee because CSR is a
board-driven process. The government plays no direct part in a company's CSR
projects or programmes being approved and carried out.113
Complications resulting from the current issues have forced businesses to apply
their integrated skills to address them while maintaining focus on the vision and
primary goals that gave rise to the business activity. This also applies to CSR,
which aims to satisfy the demands of the many stakeholders.
In this regard, businesses focused on social responsibility have discovered the
need to put into practise higher-level methods that enable them to maintain their
initial orientation despite the current circumstances. Companies are anticipated to
111
‘The Companies (Amendment) Act’, 2019
112
‘The Companies (Amendment) Act’, 2019
113
General Circular No. 14/2021 on CSR 2021 by MCA dated 25th Aug, 2021
https://www.mca.gov.in/Ministry/pdf/FAQ_CSR.pdf

64
 have had the adaptability and strategic flexibility required to maintain their social
responsibility initiatives under the new viewpoint in respect to the
aforementioned. The restricted particular literature that prevented a more thorough
analysis at the time of the study evaluation is one of the study's weaknesses.

Chapter 4.2: Contribution of the Research:

This section emphasises the research's useful contribution and how it has contributed
in the literature of the 21st Amendment of CSR Policies and its impact during the
pandemic. The impact of the 21st Amendment to CSR laws on the pandemic scenario
and how business organisations' criticism of the Amendment can aid in future changes
are all major contributions made by the current study to the literature on CSR. Firstly,
the study has examined the CSR 21st Amendment in accordance with the pandemic.
Secondly, we have evaluated the effectiveness of the ‘CSR Amendment 2021’ during
the pandemic and lastly, the extent to which the CSR policies need to be modified
going forward and the future scope in this particular research topic.

“Corporate social responsibility” (CSR) is a concept whereby businesses take into

account the interests of society and the environment in addition to their profitability
and growth by taking accountability for the effects of their activities on stakeholders,
the environment, and other members of the society. According to analysis, CSR
differs from philanthropy and charity because it is not a firms gain, long-term
advantages from CSR initiatives and Triple Bottom Line. The bottom-line method
shows how business, society, and the environment are related. It strives for business
sustainability. Globalization, governments, intergovernmental organisations (such as
the U.N., OECD, and ILO), the advancement of communication technology, and
stakeholder awareness are just a few of the many elements that influence firms' CSR
policies.

The COVID-19 epidemic, which impacted every nation on earth, was the worst in
recent memory, and its economic effects were immediately apparent. The capacity to
adapt to the new market will be crucial for a company's survival because it has been
formed by the travel restrictions that practically every country has put in place to stop
65
the disease's spread.114 Since small and medium-sized enterprises have been the most
severely affected by the pandemic, they will need to quickly reinvent themselves if
they hope to survive in this unexpected situation.115 Making the proper judgments is
vital to strengthening businesses in this new world because the future of business is
unpredictable.

There is a pressing need to investigate how people, clients, and consumers reacted
(both favourably and unfavourably) to various lockdown limitations. Changes in
behaviours could be obvious (as in tourist preferences and the shift to online buying
and entertainment), but subtle changes in attitudes, values, and beliefs are more likely.
Similar to how Covid-19 sparked sector, corporate, and organisational innovation,
more study is required to delve into the factors that influence efficacy and to pinpoint
the improvements that will be most advantageous in the long run.

With the potential to spark a new era of CSR development in the long run, this
pandemic presents excellent chances for businesses to actively participate in various
CSR efforts during the crisis. Due to the pandemic, consumers' attention has been
drawn to the ethical implications of their choices, which is likely to lead them to make
more responsible and charitable purchases. It appears likely that businesses and
organisations will reflect these developments. Intelligent marketers will adjust their
policies and techniques to reflect the fundamental changes to our lives that will alter
our beliefs, attitudes, and views. Will the idea of social marketing experience a
sustained comeback, along with more ethical company practises? So, we hope.
Whatever the changes, it is very likely that the former methods of marketing operation
will need to adapt and will be implemented to accommodate the new reality.

It is clear that the CSR system has undergone major changes as a result of the
amended rules for 2021. The revisions have placed a strong emphasis on strict
adherence to the Act while also emphasising other crucial elements like responsibility
and transparency within the businesses engaging in CSR initiatives. Additionally, the
amendment regulations 2021 were crucial during this pandemic when the majority of
114
Patricia Carracedo, Rosa Puertas, Luisa Marti,
“Research lines on the impact of the COVID-19 pandemic on business. A text mining analysis,
Journal of Business Research”, Volume 132, 2021, Pages 586-593, ISSN 0148-2963,
https://doi.org/10.1016/j.jbusres.2020.11.043.
115
Ibid.
66
the businesses made financial contributions and offered assistance in addressing the
issues brought on by the virus. It can be claimed that the step taken to adopt the
revisions was in the right direction and assisted in redesigning the CSR regime, even
though additional suggestions made by the HLC that are very essential still need to be
implemented in addition to the adjustments that have already been done.

There is a strong likelihood that investors will start moving to other nations without
such regulations once CSR becomes required in the country. When it comes to their
income tax, educational tax, and other taxes, the Indian government provides
significant incentives to businesses and international investors. “The government is
allowing businesses a lot of leeway to attract more FDI, so the mandatory aspect of
CSR just doesn't make sense. On the other hand, forcing investors to choose another
nation as an alternative by making CSR mandatory. As a result, mandating CSR
activities has drawbacks of its own, some of which were also covered in the preceding
chapter.”116

Many businesses have actively participated by making contributions to CSR

Activities above and beyond the CSR budget allotted to them in light of the present
pandemic crisis and its effects on the economy. “Companies have stepped out to raise
awareness about COVID-19 and the steps that must be done to stop this virus from
spreading in addition to contributing money and other requirements like PPE Kits,
masks, sanitizers, food, etc.”117 The epidemic has affected a vast number of
individuals in many ways, and the numbers are continually growing. Businesses have
actively contributed to aid distribution and may do so in the future as well.

We have provided some initial comments in this essay on how the current Covid-19
pandemic affects CSR, consumer ethics, and marketing philosophies. In the short and
medium terms, this epidemic presents excellent opportunity for businesses to actively
participate in a variety of CSR projects. In light of the epidemic, “consumers'
attention has been drawn more to the ethical aspects of purchasing decisions, which is

116
Upadhyay, Niteesh Kumar & Rathee, Mahak. (2021). “AN ANALYSIS OF CORPORATE SOCIAL
RESPONSIBILITY IN INDIA WITH SPECIAL REFERENCE TO COVID-19 SITUATION”. 42-61.
117
Ibid.

67
probably going to lead them to make more responsible and charitable purchases” 118.
The likelihood of businesses and organisations reflecting such changes seems to be
high. Our views, attitudes, and opinions will alter as a result of fundamental changes
in our lives, and savvy marketers will adjust their methods and policies accordingly.
Will the idea of social marketing experience a sustained comeback, along with more
ethical company practises? So, we hope. Whatever changes take place, it appears
fairly likely that the ways marketing has operated in the past will need to alter and do
so in order to accommodate the new reality.

118
Hongwei He, Lloyd Harris, “The impact of Covid-19 pandemic on corporate social responsibility
and marketing philosophy, Journal of Business Research”, Volume 116, 2020, Pages 176-182, ISSN
0148-2963, https://doi.org/10.1016/j.jbusres.2020.05.030.
68
Chapter 4.3: Future Scope of the Study:
The future scope of the study involves the following considerations:

 Because of the pandemic's extensive field of study, we were unable to include 
every idea in the research that followed. The pandemic is an international
occurrence that has had a variety of effects on the entire planet. As a result of
the study's broad breadth, researchers will be able to explore and include a
variety of additional ideas that aren't covered in the current study in the future.
 The evolution of CSR and the arrival of the pandemic has emphasised that
anything could happen anytime. Thus, we must have to be prepared in case if
there arrives any new pandemic situation in the society.
 This research involves the study of the reports and notification of limited
companies, business organisations and the NGO’s. The study analyses the
annual reports of firms using content analysis. It measured the reports of the
companies and quests of some famous entrepreneurs to examine the effect of
the modifications in the rules. The CSR performance may be compared in
future studies utilising various unit analysis techniques.
 While several sorts of procedures can be utilised by a researcher in future
studies, the qualitative research methodology used in the study relies on the
analysis of the legal researcher's controlled observations over the previous
research works and the documented data. There are other methods also that
can be used by a researcher in future studies (such as Descriptive Legal
Research, Quantitative Research, Analytical Legal Research, Applied Legal
Research, Conceptual Research and Empirical Research).
 The scope of this research is only limited to India and Indian organisations.
The limit of the companies might be extended in the future research works by
a researcher as well as the future research has an opportunity to include
foreign industries and other countries as a reference to their study.
 We accept that this study has several limitations despite having gathered and
examined a sizable volume of media content. The coronavirus pandemic
problem was still ongoing when this review was done. Even while there are
indications that some states and nations throughout the world have been able
69
to 'flatten the curve' and stop the virus's spread, it will still take some time
before things return to "business as usual." So, while the event hasn't ended
yet, the review represents a snapshot of the situation at a certain moment in
time.

70
Chapter 4.4: Summarised Conclusion:
Sustainability and ethical behaviour have been hot concerns in recent years. They
have been discussed from a variety of angles in the academic and corporate worlds,
including CSR, socially responsible investing, and socially responsible consumerism.
Modifying customer demand is one of the finest ways to have an impact on company
actions in this area. Socially conscious customers consider how their actions will
affect others and utilise their purchasing power to pressure businesses to adopt social
change. On the other hand, a consumer's ethical behaviour relates to how they choose
a business and a product based on their political, religious, environmental, or social
beliefs, as well as how they take labour issues into account when making their
purchases.

The COVID-19 pandemic has had a detrimental effect on the global economy, the
way of life for millions of people, and the business community. As a result of the
aforementioned and the fact that ethical, socioeconomic, and managerial factors serve
as the foundation for current public awareness, CSR components have gained in
significance. The many confinement-related experiences, both good and bad, have
altered society behaviour. In order to reorient societal behaviour toward greater
cooperation in order to jointly overcome the effects that have been generated,
companies have the opportunity to include and increase their responsible practises.
The limitations in terms of the availability of food, anxiety, and job insecurity; the
increase in risk perception; and the decrease in desire to contribute to the environment
provide an opportunity for this.

The CSR system has clearly undergone major changes as a result of the amended
rules for 2021. In addition to placing a strong emphasis on strict adherence to the Act,
the amendments have also given attention to other crucial elements including
responsibility and transparency within the businesses engaging in CSR activities. In
addition, the amendment regulations 2021 were extremely important during this
pandemic when the majority of the businesses made financial contributions and
offered assistance in order to combat the issues that resulted from the epidemic.
Although additional, highly significant recommendations made by the High Level

71
Committee and the Ministry of Corporate Affairs need to be implemented in addition
to the changes already made, failing to do so resulted in some negative effects on the
current framework. Nonetheless, it can be said that the decision to introduce the
amendments was a step in the right direction that assisted in modernising the CSR
regime.

72
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