Policy Implication of Indian Companies Act 2013 on Corporate Social Responsibilities (CSR) and its Impact on Domestic Company and MNCs Spending

More and more Indian business organizations embrace the practice of CSR under different names such as corporate sustainability, social responsibility, and corporate citizenship. These are well reflected in corporate reports on their respective websites as well as in other surveys and rankings of CSR conducted by organizations such as The Times Foundation and Karmayog. Most business organizations now believe that investing a part of their profits and efforts in the society and natural environment from which they draw resources has positive implications for their own well-being. The benefits of CSR are also substantiated by research focusing on the relationship between CSR activities and firm's financial performance, competitive advantage, reputation and legitimacy, employee attitudes, and synergistic value creation. The recent proposed draft of CSR rules under section 135 of the Companies Act 2013 guiding principles evolves its relationships with stakeholders for the common good, and demonstrates its commitment in this regard by adoption of appropriate business processes and strategies. Thus CSR is not charity or mere donation. They use Corporate Social Responsibility (CSR) to integrate economic, environmental and social objectives with the company's operations and growth. In the exercise of the powers conferred under clause (o) and clause (q) of sub-section 3 of Section 134 readwith Section 135 and sub-sections (1) and (2) of section 469 of the Companies Act, 2013 the Central Government hereby makes the following Rules, namely: 1. These rules may be called the Corporate Social Responsibility Rules, 2013. 2. They shall come into force on the date of their publication in the official gazette and shall be applicable from the financial year 2014-15.