Corporate Social Responsibility is an idea whereby companies participate in social and environmental concerns in their business operations along with the communications with their stakeholders. It is a way through which a company tries to achieve a balance of economic, environmental, and social requirements. In this sense, it is a concept of charity, sponsorships or philanthropy. It is a self-regulating model which further makes a company socially acceptable. It a broad concept and can be followed or used in many ways like job training programs for the disabled, helping non-profit sectors, provide support in case of any disaster relief programs. To make it simpler, it can be defined as a concept where top-notch companies make massive profits and donate some amount for charitable purposes. This social responsibility becomes an integral part of the wealth maximization process as it enhances business competitiveness. The Companies Act, 2013 (the “Act") through Section 135 makes it mandatory for companies meeting certain thresholds to spend a certain percentage of their net profits towards CSR activities.
The World Health Organization has declared COVID 19 as a disaster. Concerning this, the Ministry of Corporate Affairs has issued a circular which mentions that the funds to be spent on curbing COVID 19 shall be treated as funds for CSR activities. The MCA further explained that the funds might be used for activities mentioned below shall be interpreted liberally –
This step has come as a relief during this time when the entire country is suffering. It is also an unusual step taken up by the MCA towards COVID-19. This is an encouraging step by the MCA towards providing an opportunity for the companies to play an active role in talking COVID–19. As our society is struggling with the grave consequences of coronavirus, all the corporations now have a responsibility to step forward and help support the government in implementing the actions. It is so because the economy is falling, several people are losing their jobs, and it further becomes a social obligation on the companies to adhere to the basic principles.
India has been very smooth and instant in the corporate field towards contributing and has donated generously to fight COVID-19, keeping in mind the CSR. Though the contribution or donation of Indian companies did not stop only at monetary or pecuniary contributions, they have expanded their business to fight the pandemic effectively.
Maruti Suzuki India Limited, a car maker company, along with AgVa Healthcare, has taken a step toward manufacturing low-cost ventilators. Along with these two companies, Mahindra and Mahindra Limited has also started producing the same. Even, FMCG companies like CavinKare, Dabur, Emami, Nivea India, Raymond Consumer Care, and VLCC have begun to manufacture sanitizers or are planning to do the same. Bacardi India and Diageo India are alcohol-based companies and sugar companies such as DCM Shriram, Dalmia Bharat Sugar Mills, Balrampur Chini Mills, and Bajaj Hindusthan Sugar have also joined this business. Along with sanitizers, there are several companies making masks as well, like Defence Research and Development Organisation (DRDO), India's leading garment maker Arvind and Welspun. Bata India also manufactured masks, though, for a short duration for donating purposes.
The list of the companies who have contributed monetarily to the prime Minister care fund is mentioned below-
On the other hand, some companies have claimed to have no money to pay their staff, have also contributed towards this cause. Cure fit is a fitness startup, has closed down many of its centers, and fired several employees but still managed to donate a generous amount for the same.
The situation that our country is facing and the response that the Indian Companies are giving is a recommendable one. These companies must keep on magnifying their social engagement with the offerings, whether monetary or not, in the future as well. This is because the lockdown is not expected to be lifted very soon, and hence it is expected that there will be more requirements of such donations. It is a noted fact that the companies shall be focused on wealth maximization and profit maximization. Still, there may be a situation where those companies need to act like a corporate citizen and help society in need. There is plenty of evidence that a company's involvement in the concept of CSR has resulted in a positive impact. It further helps the investors make decisions based on the company's shares and can also evaluate its overall well-being.
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