The Rise of “Corporate Social Responsibility” and India’s New CSR Law

By Anirudh Kumar


In recent years, the corporate sector has become increasingly involved with the work of the development sector, catalyzed by the growing interest of corporates to be involved in activities such as poverty alleviation and reducing the global burden of disease. Corporate involvement in achieving social, economic, and health-related goals in marginalized populations is called “Corporate Social Responsibility” (“CSR”). The name itself reflects the attitude that companies are morally obliged to provide for the betterment of society. In fact, companies have been providing for social betterment in different ways for a long time, including medical care, insurance, housing, and other benefits to employees and their families.

However, corporates are now joining the global push to achieve the UN Millennium Development Goals (international health and development benchmarks), which have thus far been tackled through WHO programs, efforts of organizations like the Global Fund, and the activities of thousands of NGOs. CSR has taken many forms in the last decade, including full in-house CSR health and development programs (disease eradication campaigns, hospital and school construction, etc.) as well as partnering with NGOs or government to achieve social, economic, and health goals. In the latest push to involve corporates in development activities, India has become the first country to sign corporate responsibility into law.

The new law, a part of the new “Companies” bill, mandates that any qualifying company must donate at least 2% of the average net profits made in the company’s preceding three financial years to CSR. To qualify, a company must have either (1) a net worth of 500 crore rupees (~$83 million USD); (2) turnover of 1,000 crore rupees (~$166 million USD);  or (3) a net profit of 5 crore rupees ($833,000 USD). The donation will be structured and monitored by a company board of directors. As per the law, “CSR activities” include all activities specified by the MDGs as well as employment-enhancing vocational skills, social business projects, and contributions to the Prime Minister’s National Relief Fund.

Here at CRHP, we strive to produce sustainable, lasting change in our communities, and realize the importance of corporations in this shared goal. Without the involvement of the private sector in addition to our existing relationships with government, other NGOs, and international organizations, we will not be able to continue to successfully spread the message of community-based health care and development, nor make sustainable change in the lives of so many. Thus, we’re excited to take advantage of this new law and establish new partnerships with corporations. As we look towards future partnerships, we want to send a big thank-you to our current and former partners, such as Indian Oil, Ambuja Cement, EdelWeiss Group, and the Volkart Foundation.

With this new influx of corporate support, NGOs and development organizations across India will be able to enhance the quality and scope of their programs. There is potential for millions of lives to be bettered by this new law and we hope this mandate spurs people around the world into action to work for the poorest of the poor.


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