The corporate social responsibility of business entails the simultaneous fulfillment of the firm’s economic, legal, ethical, and philanthropic responsibilities. In equation form, this might be depicted as follows: Economic Responsibilities + Legal Responsibilities + Ethical Responsibilities + Philanthropic Responsibilities = Total Corporate Social Responsibilities of Business. According to new legislation companies with the sizable business would need to spend a minimum 2% of the net profit of the benefit of the society. They have the responsibility to serve and they are accountable. The new rule will be applicable to Indian companies as well as foreign companies. Funds given to political parties and money spent for the benefit of the companies own employees will not count as corporate social responsibility. Corporate social responsibility rules affect from April 1st, 2014 as part of the new Companies Act. They will apply to companies with at least Rs 5 crore net profits, or Rs.1, 000 crore turnovers or Rs.500 crore net worth. A company can also carry out CSR works through a registered trust or society or a separate company. As per the rules, a company may also collaborate with other companies for CSR activities, provided they have to separately report about spending on such projects programs. When it comes to having the manpower for CSR works, the government has said that companies can spend only up to 5 percent of total CSR expenditure for them in a single financial year. This would be applicable for own personnel as well as those of their implementing agencies. Governments are responsible to address social issues, not the companies. A corporate executive is not elected representatives of the people, nor are they appointed as social guardians. They, therefore, lack of social mandate that a democratic society rightly demands of those who would pursue ethically or socially motivated policies. To be sure, the state and the political process will and must remain the primary mechanisms for protecting the public interest. If the governments will take care the public interest then there is no space for the corporations. But governments have been failed to protect and improve the lives of the people. By making CSR compulsory Government may escape serving people or government want to shift its responsibility on others.
Keyword: Social Responsibility, Business Environment
Siddaramu B