Abstract
In India, under Section 135 of Companies Act, 2013, companies that present a net worth of more than ₹500 crore, turnover over ₹1,000 crore, and a net profit of more than ₹5 crore are required to contribute at least 2% of three-year average profit under Schedule VII to causes such as eradication of poverty, education, healthcare, women empowerment, environmental sustainability, and rural development, creating a pioneering commitment through a binding CSR to causes worldwide. This research chronicles the development of CSR from 19th century philanthropies of Europe and ‘daan’ traditions of India combined with Trusteeship concept of Gandhiji to post-1991 MCA guidelines of 2009, 2011 NVGs, and further to the 2013 Act and Amendments of 2019-2021 to transfer unspent amounts,Cases like M.C. Mehta (liability), Indian Council for Enviro-Legal Action (polluter pays), and Great Indian Bustard show that the concept of CSR is linked to Article 21 and the Directive Principles (Articles 38-48A) encompassing environmental rights. NIFTY 50 Analysis (FY 2020-2024) reveals ₹25,000+ crores of annual expenditures: 35% on education (TCS skill trainings), 25% on healthcare, and 15% on the environment; and top-performing companies like ‘Reliance (₹1,050 crores in FY 23, with a utilization rate of 73%)’, ‘Tata (111-382%, over mandate)’, and ‘HDFC (₹ The areas it analyses include the role of CSR committees, Section 166 obligations of duty, SEBI BRSR, and the enforcement of the MCA by imposing penalties to jail terms, then criticism of green washing statements and bias of proximity (60% of companies under 100km), taxation concerns.
Introduction:
Corporate Social Responsibility (CSR) under Section 135 of the Companies Act, 2013, of India requires every eligible company- those having a net worth above ₹500 crore or a turnover higher than ₹1,000 crore, or a net profit of more than ₹5 crore-to spend at least 2% of its average net profits of the preceding three fiscal years on Schedule VII activities such as eradication of hunger and poverty, promotion of education and providing healthcare, gender equality, ensuring environmental sustainability, rural sports, and national heritage, among others, thus positioning India as the only country in the world to make corporate contributions to society legally binding. This panorex paper captures multi-faceted evolution of CSR: starting from 19th century European industrial philanthropy and India’s ancient traditions of ‘daan’ interfused with Gandhian trusteeship, through post-1991 liberalization era’s MCA’s voluntary guidelines of 2009 and NVGs of 2011 to the game-changing 2013 mandate further strengthened with amendments of 2019-2021 regarding transfer of unspent amount to specific account or fund of government schemes, amidst judicial pronouncements like M.C. Mehta v. Union of India (principle of absolute liability for Oleum Gas Leak), Indian Council for Enviro-Legal Action (polluter pays), and the Great Indian Bustard case making a linkage of CSR to constitutional duty of environment protection under Article 21. Based on empirical trends from NIFTY 50 companies for FY 2020-2024, it reveals the aggregate spends exceeding ₹25,000 crores annually comprising 35 per cent on education, for example, skilling programs of TCS; 25% health, 15% environment; with leaders such as Reliance-actual: ₹1050 crore against budgeted ₹1440 crore in FY23, 73 per cent utilization, TCS-113% utilization, HDFC Bank-Parivartan-₹945 crore in FY 24 impacting 10 lakh households, ITC, Tata Group-CSR spends by various group companies ranged between 111% and 382% over the statutory requirement, Infosys; already surpassing thresholds while relating their CSR intensity with profitability-its Spearman rank-order correlation r=0.42, better ROE-22% versus 15%, ROA-12% versus 8%, share price growth YoY-15%, and market cap amidst BRSR disclosures. The present analysis dissects statutory mechanics (CSR committees, annual plans, impact assessments), governance synergies, Section 166 director duties, SEBI BRSR for top 1,000 firms, MCA/ROC enforcement via National CSR Portal, up to jail terms penalties for non-compliance; the leading policy debates on mandatory vs. voluntary models as ‘hypothecated tax’ blurring state welfare under Directive Principles (Articles 38-48A); critiques on greenwashing, proximity bias, 60% spends within 100km of operations, uneven reporting-advanced BRSR at 85/100 vs. basic 60/100-and tax treatments, non-deductible under Section 37(1) but 50% via 80G, while calling for reforms like mandatory outcome audits, standardized SDG-linked metrics, collective platforms, and Schedule VII expansions for authentic value creation beyond mere box-ticking.