Corporate Social Responsibility (CSR) has become an increasingly important aspect of the business world, as companies strive to make a positive impact on society and the environment. However, India’s CSR law has presented various challenges to businesses, including a lack of clarity and stability in the legal framework. Several recommendations can be followed to address these challenges and promote the effective implementation of CSR.
Firstly, it is essential to establish a clear and stable theoretical framework for CSR law, accompanied by a well-defined set of broad categories for Schedule VII. This will provide clarity and stability to the law and ensure that companies can comply with it without difficulty. However, these broad categories should not be too specific and should be subject to fixed interpretations by the judiciary.
Secondly, the broad categories of Schedule VII should align with the Sustainable Development Goals (SDGs). This will help companies monitor and report their CSR projects and contribute to the nation’s progress in achieving these goals. It will also facilitate the monitoring and evaluating CSR projects, making it easier for the government to regulate and enforce the law.
Thirdly, the interaction of CSR with other laws, such as the Apprenticeship Act and the Income Tax Act, should be settled in a clear and unambiguous format. This will clarify companies’ legal obligations and help them comply with the law more easily.
Fourthly, CSR funds should be treated as a national corpus for social action and development, not as contingency funds that the government can use during a budget shortfall. This will help to ensure that the CSR funds are used for their intended purposes and not diverted for other purposes.
A robust and sustainable public-private partnership (PPP) model should be adopted to monitor CSR activities. This model should be aligned with the government’s priority sectors and involve the skills and knowledge of experienced development professionals to monitor and report CSR projects.
Finally, companies should treat their CSR funds as a pool for community-based organisations to execute their social responsibility rather than simply hiring private CSR consultants to research, select organisations, and monitor CSR projects on the company’s behalf. This will help ensure that the CSR funds are used for high-impact projects that benefit the community.
In conclusion, establishing a secure and stable structural framework for CSR law in India is essential to contribute to sustainable impact. These recommendations can help establish a stable and effective legal framework for CSR that benefits companies and the community. In addition, companies must recognise their role in promoting social responsibility and contribute to the nation’s progress towards achieving the Sustainable Development Goals.