India's Corporate Social Responsibility Proposal

Keywords: corporate social responsibility, CSR, duties, CSR committee

Pending legislation in India may create a novel and material development in Corporate Social Responsibility (CSR) that likely would affect all Indian corporations as well as international corporations with subsidiaries or affiliates incorporated in India. If enacted, the legislation would require companies to spend at least 2 percent of their net profits on CSR activities. The proposal is designed to increase funding of CSR programs through social pressure, as the only sanction for failing to spend this amount is that the company must specify why it failed to do so in a report that is presented to the company's Annual General Meeting.