CSR in India

The new Companies Act, 2013 contains an important clause (Clause 135) that mandates CSR regulations for Indian companies.
The final rules were notified on 27th February 2014, coming into force on 1st April 2014.
 Profit
1. Net profit before tax, not including profits arising from branches
outside India.
2. The two percent CSR spending needs to be computed as two
percent of the average net profits made by the company during every
block of three years.
 CSR Budget
Expenditure
i) Eradicating hunger, poverty and malnutrition, promoting preventative health
care and sanitation and making available safe drinking water
ii) Promoting education including special education and employment enhancing
vocation skills especially among children, women, elderly, and the differently
abled and livelihood enhancement projects.
iii) Promoting gender equality, empowering women, setting up homes and
hostels for women and orphans; setting up old age homes, day care centres and
other such facilities for senior citizens and measures for reducing inequalities
faced by socially and economically backward groups
iv) Ensuring environmental sustainability, ecological balance, protections of
flora and fauna, animal welfare, agroforestry, conversation of natural resources
and maintaining quality of soil, air and water
v) Protection of national heritage, art and culture including
restoration of buildings and sites of historical importance and works of
art; setting up public libraries; promotion and development of traditional
arts and handicrafts: (Dalmia Bharat Group: Taj Mahal)
vi) Measures for the benefit of armed forces veterans, war widows
and their dependents (HP)
vii) Training to promote rural sports, regionally recognised sports,
Paralympics sports
viii) Contribution to the Prime Minister’s National Relief Fund or
any other fund set up by the Central Government for socio-economic
development and relief and welfare of the Scheduled Castes, the
Scheduled Tribes, other backward classes, minorities and women;
ix) Contributions or funds provided by technology
incubators located within academic institutions which are approved by
the Central Government;
x) Rural development projects
 Directives for
Companies
1. Create a “CSR Committee”, made up of three or more Directors,
one of whom must be an independent director.
2. Report details of all CSR initiatives undertaken by the
company in the Directors’ Report and on the company website at
the end of each year.
3. Create a “Corporate Social Responsibility Policy” that details
which activities will be undertaken by the company, and what budget
will be spent on them. This should be published on the company’s
website.
CSP Pyramid
Corporate Social Performance
 CSR Strategies
https://www.pmi.org/learning/library/corporate-
social-responsibility-strategies-6976
 Employer Branding
An employer brand refers to the perception your
current and potential employees have of your
company. As an action, employer branding
involves deliberately establishing your company’s
values, work culture, and personality to ensure
they align with your ideal candidates’ aspirations.

https://www.youtube.com/watch?v=DirBe7d01jU
 Social Identity Theory
• According to social identity theory, social behaviour is
determined by the character and motivations of the person as
an individual (interpersonal behaviour) as well as by the
person's group membership (i.e., intergroup behaviour).
• Henri Tajfel (1979) proposed that the groups (e.g. social class,
family, football team etc.) which people belonged to were an
important source of pride and self-esteem. Groups give us a
sense of social identity: a sense of belonging to the social world.
• We divided the world into “them” and “us” based through a
process of social categorization (i.e. we put people into social
groups).

https://www.youtube.com/watch?v=mBDULN6Jtn0
Social categorization: We categorize people (including ourselves) in order to understand
the social environment. We use social categories like black, white, Australian, Christian,
Muslim, student, and bus driver because they are useful.

Social Identification (Self): We adopt the identity of the group we have categorized
ourselves as belonging to. If for example you have categorized yourself as a student, the
chances are you will adopt the identity of a student and begin to act in the ways you
believe students act (and conform to the norms of the group).

Social Comparison: Once we have categorized ourselves as part of a group and have
identified with that group we then tend to compare that group with other groups. If our
self-esteem is to be maintained our group needs to compare favourably with other
groups.
 Signalling Theory
Signalling theory is useful for describing behavior when
two parties (individuals or organizations) have access
to different information. Typically, one party, the
sender, must choose whether and how to communicate
(or signal) that information, and the other party, the
receiver, must choose how to interpret the signal.

https://www.youtube.com/watch?v=F8ZHZRMSxKg
Social Exchange Theory
Social exchange theory is a concept based on the
notion that a relationship between two people is
created through a process of cost-benefit analysis.
• Comparison Level
• Comparison Level for Alternatives
• Investment Model

https://www.youtube.com/watch?v=Hf5-OX-4huc