Corporate Social Responsibility in India: From Traditional Ethos to Contemporary Transitions

Abstract

A holistic concept of societal embeddedness has been deeply rooted in Indian tradition and continues to dominate the ethos of a significant number of contemporary corporations. The traditional wisdom literature drawn from a diverse range of religious texts emphasized a deeper level integration of secular ideas of societal good within the world of work. Though the ancient tradition emphasized more on philanthropy by imposing religious responsibilities, a deeper and integrated logic of external engagement, no doubt, was an overwhelming and critical assumption. In the twentieth century, during the country’s independence movement many of India’s indigenous business houses were inspired by the promotion of the ‘trusteeship concept’ by Mahatma Gandhi where the key goal of business was aimed at benefitting the society. The adoption of the socialistic ‘mixed economy’ model following India’s independence and subsequent major economic reform of the 1990s have seen dramatic shifts in the CSR approach in India in the recent decades. The unprecedented legal requirement for certain sized companies to mandatorily earmark 2 % of their profits towards approved corporate social responsibility (CSR) initiatives since 2014 has changed the thousands of years of ‘volunteerism’ into a new experimental stage. This paper traces these dramatic transitions of CSR concepts and practices and attempts to explore the motivations of this new law in terms of business being a critical force in strengthening healthy ecosystems, fostering social inclusiveness as well as sustaining a long term growth. As the concepts and practices of CSR evolve and expand their scope and scale, the case of India, may be of considerable relevance to the emerging economies around the world.