Corporate Social Responsibility Practices - A Study on Select CPSEs

Abstract

The new “Companies Act, 2013” has introduced a novel era in the Indian corporate world through its most innovative mandatory provision u/s 135 about “Corporate Social Responsibility (CSR)”, which requires “certain companies” to invest a “minimum two percent of its average net profits for immediately preceding three previous years on CSR initiatives” for overall societal growth and its wellbeing. This study mainly aims to conduct an analysis of CSR practices and compliances and also accounting practices for such CSR practices by Maharatna, Navratna companies and Miniratna-II category of “Central Public Sector Enterprises (CPSEs)” in the pre-and post-Act 2013 era as per the mandate CSR provisions, as well as the revised Department of Public Enterprises (DPE), guiding principles through descriptive as well as empirical analysis. The study is based on a review of 290 annual reports of 10 Maharatna Companies, 13 Navratna companies and 6 Miniratna-II companies over a period of 13 years from 2009-10 to 2021-22. Content Analysis and Cluster Analysis have been employed in the study, and two indices – Investment Index and Disclosure Index have been computed. In the pre-Act era, it has been observed that only 10% of the select CPSEs were transparent in disclosing their CSR activities and investments in the pre-Act era. However, in the post-Act era, more transparency and consistency in CSR initiatives among the select corporates and more clarity in reporting those CSR practices have been observed.