TAX LAW - I

SUBMITTED TO :
PROF. DR. KAHKASHAN Y.DANYAL

SUBMITTED BY :
SAHIL CHOWDHURY
3 RD YEAR, VI th SEM

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 ACKNOWLEDGEMENT
I owe my deep sense of gratitude to my respected teacher Prof. DR.
KAHKASHAN Y.DANYAL., who rendered her constructive and
valuable guidance throughout my work, without her perspicacious
comments and scholarly guidance; I would never have been able to
complete this assignment. Her patience to go through the draft
meticulously was incredible.

I would like to express my gratitude to the entire faculty members who

rendered their invaluable help.

I also acknowledge the help provided to me by the staff members of the

library of faculty of law, Jamia Millia Islamia.

I extend my cordial gratitude to my parents for their kind appreciation

and help.

Last but not the least, I express my gratitude to all the persons who
helped me to complete this assignment.

Sahil Choudhury

B.A.LL.B (Hons)

3nd Year, 6th Semester

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 TABLE OF CONTENTS

1. INTRODUCTION …………………………………………….

2. BASIS OF CHARGE………………………………………….

3. CAPITAL ASSETS & ITS TYPES…………………………..

4. TYPES OF CAPTAL GAINS…………………………………
5. COMPUTATION OF CAPITAL GAINS……………………
6. EXEMPTION FROM CAPITAL GAINS……………………
7. CASE LAWS…………………………………………………...
8. CONCLUSION…………………………………………………

INTRODUCTION

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Mahatma Ghandi stated, ‘The wealth that one creates has to be ploughed back for the
benefitof society’. The relationships between business and society have been studied
for a long timeto find out the way through which business can pro-actively promote the
public interest byencouraging community growth, development and voluntarily
eliminating practices that harmthe public sphere, regardless of legality. Essentially,
corporate social responsibility is thedeliberate inclusion of public interest into corporate
decisions (Kakabadse and Morsing,2006). Guthrie and Parker (1990) quite convincingly
recognized the process of undertakingcorporate social responsibilities and reporting
such activities at a regular interval as anessential device for organizations towards
ensuring the long term continued existence.Corporate social responsibility has become
an inevitable priority for business leaders acrossthe globe in recent times.
Governments, activists and media now hold the companiesaccountable for the social
consequences of their actions and favorable publicity is often bestowed on companies
with prominent CSR (corporate social responsibility) programs. Yetfor all hype of
surrounding CSR efforts, they are frequently counterproductive (Vogel, 2005).The aim
of this essay is to critically evaluate the good practices of corporate socialresponsibility
in India, which will deliver an in-depth understanding of how and why thisapproach is
being practiced by different organizations in the local context.

DEFINITION OF CORPORATE SOCIAL RESPONSIBILITY

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Generally, CSR refers that organizations consider the interests of society by taking
responsibility for the impact of their activities on customers, suppliers, employees,
shareholders, communities, future generation and environment. According to
Hopkins(2003), CSR is concerned with treating the internal and external
stakeholders of the firm ethically or in a socially responsible manner and the wider
aim of corporate social responsibility is to create higher and higher standards of
living, while preserving the profitability of the corporation, for its stakeholders.
Similarly, The World Business Council for Sustainable Development (1999)
explains CSR as continuing commitment by business to behave ethically and
contribute to economic development while improving the quality of life of the
workforce and their families as well as of the local community and society at large.
On the other hand, Farmer and Hogue (1985) viewed CSR quite differently saying
that it means businesses are pursuing their economic, social and environmental
responsibilities on a voluntary basis and are integrating them into all business
operations, while interacting with their stakeholders. Logsdon et al. (2006)
mentioned an important thing about CSR that the interpretation of CSR often
changes in the area of strategic management due to the fact of varying national and
cultural factors. Later on Moon and Vogel (2008) reinforced it saying that CSR is
highly contextual and strongly depends on the country and the state of governance
of that time. However, Hopkins (2003) found in his study that businesses that
engage in CSR typically focus on some or all of the followings:
•
Environment: While focusing on this, organizations look at the environmental
impacts of their products and services, as well as what they do outside the business
to improve the environment.

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•Employees: The organizations who think in this perspective, they take care of all
the employees adequately focusing on workplace conditions, benefits, living
wages, and training.
•Communities: The organizations that care about communities they voluntarily
take advance steps to improve the quality of life for employees and their families
as well as for the local community and society.
•Regulations: While focusing at this point, organizations respect the laws fully and
often exceed them to be more socially responsible.
•Emergency supports: Sometimes organizations keep plans ready to manage
business crises and ensure safety for employees and surrounding communities.
Besides they also take initiatives to provide support in times of emergencies such
as disaster or epidemics.

Prominence of CSR

In the current globalizing world, the easy accessible and available mode of
information has enabled stakeholders to be more aware of the company, product,
and brand etc. Thus Heal(2008) stated that the 21st century is the century of the
social sector organizations and the more economy, money, and information
become global, the more community matters. Werther and Chandler (2006)

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advised in he same vein that, wherever possible, customers now want to buy
product from trusted brands, suppliers want to form business partnerships with
companies they can rely on, employees want to work for companies they respect,
and NGO’s want to work with company who work with the same vision for the
benefit of the people. Similarly Jerry and Rson (1989) viewed CSR as good
business sense in the globalizing world where companies are increasingly relying
on brand strength (particularly global lifestyle brands) to add value and product
differentiation, and where NGO-driven consumer activism is increasing. Frederick
(2006) added fuel to this assumption saying that satisfying each of these
stakeholder groups allows companies to maximize their commitment for profit to
another important stakeholder group, their investors. In contrast to this,
Friedman(1962) argued that CSR decrease shareholder’s wealth as organization’s
insiders (managers and directors) often seek to over-invest in CSR for their private
benefit to the extent that doing so improves their reputations as good global
citizens. Barnea and Rubin (2006) backedhim (1962) up saying that corporate
mangers don’t have the right skills and expertise to deal effectively with social
problems. Farmer and Hogue (1985) added to the speculation that they had this
response from their study which shows that some people consider the money spent
for CSR as a self imposed tax and think that the cost will later on passed to
consumers.

Hopt and Teubner (1985) suggested that corporations today are best positioned
when they reflect the values of the constantly shifting and sensitive market
environment in which they operate. While describing the importance of CSR,
Carroll and Buchholtz (2008) pointed outan issue that with the growing trend of
media and easy access to information through mobile,TV even the minor mistake
(such as a corruption scandal) of the company is brought in public in no time and

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this sometime fuels the activist group and likeminded people to spread message
which can lead to situation like boycott of the brand. So, in order to establish a
good corporate image, organizations need to response to social problems and
include social responsibility in their corporate objectives. However, Chahoud et al.
(2007) argued in the opposite vein that leading companies who report on their
social responsibility are basket cases and the most effective business leaders don't
waste time with this. Sometimes companies have to concentrate on social
problems due to legal provisions and agreement conditions (For example an
industrial organization in India must obtain a certification from Pollution Control
Board). However, Friedman (1972) and Levitt (1958) both highlighted that CSR is
the responsibility of politicians and government and it places unwelcome
responsibilities on businesses rather than on the government or individuals.
Besides, from the point of view of Lee (2008), the efficient use of organizational
resources will be reduced if businesses are restricted in how they can conduct their
affairs. Sometimes different situations such as natural calamities or environmental
accidents sometime demands (Dr. Pandey, 2008). For example, gas leak at the
Union Carbide plant in Bhopal, wherein the company had to monetarily
compensate through medical treatment. Major corporations which have existing
reputation problems due to their core business activities may engage in high-
profile CSR programs to draw attention away from their perceived negative
impacts (such as British American Tobacco takes part in health initiatives in all
over India).

CSR in India

CSR History

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India has a long rich history of close business involvement in social causes for
national development. In India, CSR is known from ancient time as social duty or
charity, which through different ages is changing its nature in broader aspect, now
generally known as CSR. From the origin of business, which leads towards excess
wealth, social and environmental issues have deep roots in the history of business.
India has had a long tradition of corporate philanthropy and industrial welfare has
been put to practice since late 1800s. Historically, the philanthropy of business
people in India has resembled western philanthropy in being rooted in religious
belief. Business practices in the 1900s that could be termed socially responsible
took different forms: philanthropic donations to charity, service to the community,
enhancing employee welfare and promoting religious conduct. Corporations may
give funds to charitable or educational institutions and may argue for them as
great humanitarian deeds, when in fact they are simply trying to buy community
good will. The ideology of CSR in the 1950s was primarily based on an
assumption of the obligation of business to society.

In initial years there was little documentation of social responsibility initiatives in

India. Since then there is a growing realization towards contribution to social
activities globally with a desire to improve the immediate environment (Shinde,
2005). It has also been found that to a growing degree companies that pay genuine
attention to the principles of socially responsible behavior are also favored by the
public and preferred for their goods and services. This has given rise to the

concept of CSR.

After Independence, JRD Tata who always laid a great deal of emphasis to go
beyond conducting themselves as honest citizens pointed out that there were many
ways in which industrial and business enterprises can contribute to public welfare

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beyond the scope of their normal activities. He advised that apart from the obvious
one of donating funds to good causes which has been their normal practice for
years; they could have used their own financial, managerial and human resourced
to provide task forces for undertaking direct relief and reconstruction measures.
Slowly, it began to be accepted, at least in theory that business had to share a part
of the social overhead costs of. Traditionally, it had discharged its responsibility to
society through benefactions for education, medical facilities, and scientific
research among other objects. The important change at that time was that industry
accepted social responsibility as part of the management of the enterprise itself.
The community development and social welfare program of the premier Tata
Company, Tata Iron and Steel Company was started the concepts of “Social
Responsibility.”

The term corporate social performance was first coined by Sethi (1975), expanded
by Carroll (1979), and then refined by Wartick and Cochran (1985).In Sethi’s
1975 three-level model, the concept of corporate social performance was
discussed, and distinctions made between various corporate behaviors. Sethi’s
three tiers were ‘social obligation (a response to legal and market constraints);
social responsibility (congruent with societal norms); and social responsiveness
(adaptive, anticipatory and preventive) (Cochran, 2007).

The last decade of the twentieth century witnessed a swing away from charity and
traditional philanthropy towards more direct engagement of business in
mainstream development and concern for disadvantaged groups in the society.
This has been driven both internally by corporate will and externally by increased
governmental and public expectations (Mohan, 2001).

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This was evident from a sample survey conducted in 1984 reporting that of the
amount companies spent on social development, the largest sum 47 percent was
spent through company programs, 39 percent was given to outside organizations
as aid and 14 percent was spent through company trusts (Working Document of
EU India CSR, 2001). In India as in the rest of the world there is a growing
realization that business cannot succeed in a society which fails. An ideal CSR has
both ethical and philosophical dimensions, particularly in India where there exists
a wide gap between sections of people in terms of income and standards as well as
socio-economic status (Bajpai, 2001).

According to Infosys founder, Narayan Murthy, ‘social responsibility is to create

maximum shareholders value working under the circumstances, where it is fair to
all its stakeholders, workers, consumers, the community, government and the
environment’. Commission of the European Communities 2001 stated that being
socially responsible means not only fulfilling legal expectations, but also going
beyond compliance and investing ‘more’ into human capital, the environment and
the relation with stakeholders(Bajpai, 2001). Over the time four different models
have emerged all of which can be found in India regarding corporate responsibility
(Kumar et al., 2001).

CSR needs to be understood within this context captured in the development

oriented CSR framework given below:

Model Focus Champions

Ethical Voluntary commitment by companies to public welfare M.K Gandhi
Statist State ownership and legal requirements determine J. L Nehru

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 Corporate responsibility
Liberal Corporate responsibilities limited to private owners Milton Friedman
(shareholders)
Stakeholder Companies respond to the needs of stakeholders- R. Edward Freeman
customers, employees, communities, etc.

Policy framework for CSR in India

In the developing world, governments and businesses understand that their

respective competitive positions and access to capital increasingly depend on
being able to respect the highest global standards. At one end of the spectrum,
CSR can be viewed simply as a collection of good citizenship activities being
engaged by various organizations. At the other end, it is a way of doing business
resulting in a significant impact on community and long-term sustainability.

The essence of CSR comprises philanthropic, corporate, ethical, environmental

and legal as well as economic responsibility. An alternative, synonymous to CSR,
is People, Planet, and Profit, also known as triple bottom line. In India, the
evolution of CSR refers to changes over time in cultural norms of corporations’
engagement and the way businesses managed to develop positive impacts on
communities, cultures, societies, and environment in which those corporations
operated. CSR motives changed during the independence movement in India
toward social reforms to encourage empowerment of women and rural
development.

In the last decade, CSR has rapidly evolved in India with some companies
focusing on strategic CSR initiatives to contribute toward nation building.

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Gradually, the companies in India started focusing on need-based initiatives
aligned with the national priorities such as public health, education, livelihoods,
water conservation and natural resource management. Intensive national level
deliberations on the potential role and responsibility of the corporate sector in
contributing toward addressing social issues were witnessed in the last decade. In
the last five years, the Government of India has also enhanced its focus on
persuading companies to participate in addressing social and developmental
issues, not only as a part of their social responsibility but also their business
practices. Setting an example for the private sector, guidelines regarding
expenditure on CSR activities for Central Public Sector Enterprises were issued by
Department of Public Enterprises. According to these “Guidelines on Corporate
Social Responsibility and Sustainability for Central Public Sector Enterprises”
revised by the Department of Public Enterprises (DPE), Ministry of Heavy
Industries and Public Enterprises every year, each CPSE shall with the approval of
its Board of Directors make a budgetary allocation for CSR and Sustainability
activities/projects for the year.

The National Voluntary Guidelines on Social, Environmental and Economic

Responsibilities of Business

The nine principles of National Voluntary Guidelines are:

Principle 1: Businesses should conduct and govern themselves with ethics,

transparency and accountability.

Principle 2: Businesses should provide goods and services that are safe and
contribute to sustainability throughout their life cycle.

Principle 3: Businesses should promote the wellbeing of all employees.

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Principle 4: Businesses should respect the interests of, and be responsive toward
all stakeholders, especially those who are disadvantaged, vulnerable and
marginalized.

Principle 5: Businesses should respect and promote human rights.

Principle 6: Business should respect, protect, and make efforts to restore the
environment.

Principle 7: Businesses, when engaged in influencing public and regulatory

policy, should do so in a responsible manner.

Principle 8: Businesses should support inclusive growth and equitable

development.

Principle 9: Businesses should engage with and provide value to their customers
and consumers in a responsible manner

Current state of CSR in India

While studying the current state of CSR in India Cheung et al. (2009) commented
that India’s economic reforms and its rise to become an emerging market and
global player has not resulted into substantial changes in its CSR approach.
Contrary to various expectations that India would adopt the global CSR standards,
its present CSR approach still largely retains its own characteristics adopting only
some aspects of global mainstream of CSR. Furthermore, Arora and Puranik
(2004) declared that Indian CSR is still in a confused state. Their (2004)study
concluded that though the Indian understanding of CSR seems to be shifting from
traditional philanthropy towards sustainable business, philanthropic patterns still
remain widespread in many Indian companies and community development still

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plays the decisive role in CSR agenda. The underlying pattern of charity and
philanthropy means that entrepreneurs sporadically donate money to external
stakeholders as communities and general social welfare bodies (such as schools or
hospitals) without any concrete or long-term engagement.
Ahmed (2009) contributed in the same context through an empirical research,
under the supervision of ASSOCHAM Research Bureau, on 300 Indian companies
which are active in26 various theme areas for their CSR initiatives. Her (2009)
research, which was later unsupported by the survey of Mumbai based online
organization Karmayog (2009), showed that community welfare perceived to be
the top priority area on the corporate sector’s list with a share of 21.93 per cent out
of the total 26 activities. It involves activities that focusmore towards the under-
privileged community that lives around the vicinity of company plants, facilitating
education and health care and supporting projects that lead to employment
generation. The second most sort CSR initiative followed by Indian industrialist is
towards providing education and enlightening the youth of the country. CSR
initiative for education carved out a share of 19.64 per cent. The corporate sector
helps in imparting education to the deprived kids in the urban areas along with the
children from rural areas that do not have any access to medium of information.
They provide funds that help in setting up local schools, colleges and centers for
learning and education. Since, global warming is the buzz word now-a-days,
Indian corporate sector as responsible members of the society have initiated their
efforts to preserve and save it. Thus, environment is the third most prioritized area
undertaken in CSR activities, with a share of 17.02 per cent. CSR projects in this
area deliver solutions that are both environmental and business friendly, providing
financial benefits as well as improving the firm's image as an environmentally-
aware company. The fourth most popular area, that corporate sector get involves
in is the health care. They offer mobile medical services with medical help along
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with organizing regular medical camps to eradicate diseases, creating awareness
on preventive health care among others. Among the 26 various CSR initiatives,
health carved out a share of 15.22 per cent. The Indian conglomerates are equally
extending their support in the development of the rural areas. They are providing
both financial and infrastructural assistance towards agriculture, animal
husbandry, cottage industries by developing local skills, using local raw materials
and helping create marketing outlets. Thus, it is the fifth most prioritized area
under CSR initiatives contributing a share of 6.06 per cent. Rest of the other CSR
initiatives have a very low percentage of implementation such as women
empowerment (3.44%), donations (2.95%), disaster relief (2.29%), children
welfare (1.47%), poverty eradication (1.47%), blood donation (0.98%), training
(0.49%),HIV/AIDS (0.16%), and relief work (0.16%) etc. A portion of the
research of Ahmed (2009)also focused on area wise concentration of CSR
activities in India. The result highlighted that, out of the 20 states/UTs at India,
Maharashtra received maximum attention from Indian industrialists for initiating
their CSR activities with a share of 35.68%. It is followed by Gujarat (11.62%),
Delhi (9.66%), Tamil Nadu (9.17%), Andhra Pradesh (7.04%), West Bengal
(6.71%), Karnataka (6.55%), and Rajasthan (3.27%) etc. Most of the Indian
companies are now expected to discharge their stakeholders ‘responsibilities and
social obligations along with shareholder wealth maximization goal. Most of the
leading corporations in India are involved in corporate social responsibility
programs in the areas like education, health, livelihood creation, skill development
and empowerment of the weaker sections of the society. Nevertheless, admirable
and notable efforts for CSR have come from the Tata group, Infosys, Bharti
Enterprise, Coca-Cola India, PepsiCo, Nestle, ITC, and Welcome group etc.
Considered as pioneers in the field of CSR, the Tata group has played an active
role in nation building & social economic development. Beverages Company
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Coca-Cola India has been awarded the 'Golden Peacock Global Award for
Corporate Social Responsibility-2008'. In fact, four Indians, including Sunil
Mittal-Chairman and Managing Director of the Bharti Group, Anil Agarwal-
Chairman of mining outfit Vedanta Resources, Shiv Nadar-Chairman of HCL
Technologies and NGO activist Rohini Nilekani were recently featured in the
Forbes list of "48 Heroes of Philanthropy"(Maheshwari, 2010). Still after such
involvement with CSR issues, Karmayog (2009) stated about the current scenario
of CSR in India that it has not taken off yet and nearly half of the top companies
do nothing in way of CSR.

LEGAL POSITION RELATING TO CORPORATE SOCIAL

RESPONSIBILITY IN INDIA

In India CSR is in a very much budding stage and there is no such specific Act,
Rule or Regulation relating to CSR However, there are voluntary guidelines issued
by the Ministry of Corporate Affairs and guidelines issued by Ministry of Public
Enterprises and Ministry of Heavy Industries of the Government of India.
A. Voluntary Guidelines by Ministry of Corporate Affairs
The Fundamental Principle of guidelines says, “Each business entity should
formulate a CSR policy to guide its strategic planning and provide a roadmap for
its CSR initiatives, which should be an integral part of overall business policy and
aligned with its business goals. The policy should be framed with the participation
of various level executives and should be approved by the Board.”
The Guidelines provide certain core elements of CSR
Policy, namely –
• Care for all Stakeholders,
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• Ethical functioning,
• Respect for Workers' Rights and Welfare,
• Respect for Human Rights,
• Respect for Environment and
• Activities for Social and Inclusive Development

The Companies Act, 2013

In India, the concept of CSR is governed by clause 135 of the Companies Act,
2013, which was passed by both Houses of the Parliament, and had received the
assent of the President of India on 29 August 2013. The CSR provisions within the
Act is applicable to companies with an annual turnover of 1,000 crore INR and
more, or a net worth of 500 crore INR and more, or a net profit of five crore INR
and more. The new rules, which will be applicable from the Act lists out a set of
activities eligible under CSR. Companies may implement these activities taking
into account the local conditions after seeking board approval.
The indicative activities which can be undertaken by a company under CSR have
been specified under Schedule VII of the Act. The draft rules (as of September
2013) provide a number of clarifications and while these are awaiting public
comment before notification, some the highlights are as follows:
• Surplus arising out of CSR activities will have to be reinvested into CSR
initiatives, and this will be over and above the 2% figure.
• The company can implement its CSR activities through the following methods:
- Directly on its own
- Through its own non-profit foundation set- up so as to facilitate this initiative
- Through independently registered non-profit organisations that have a record of
at least three years in similar such related activities
- Collaborating or pooling their resources with other companies
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• Only CSR activities undertaken in India will be taken into consideration
• Activities meant exclusively for employees and their families will not qualify
• A format for the board report on CSR has been provided which includes amongst
others, activity-wise , reasons for spends under 2% of the average net profits of
the previous three years and a responsibility statement that the CSR policy,
implementation and monitoring process is in compliance with the CSR objectives,
in letter and in spirit. This has to be signed by either the CEO, or the MD or a
director of the company Governance Clause 135 of the Act lays down the fiscal
year 2014-15 onwards, also require companies to set-up a CSR committee
consisting of their board members, including at least one independent director.
The Act encourages companies to spend at least 2% of their average net profit in
the previous three years on CSR activities. The ministry’s draft rules, that have
been put up for public comment, define net profit as the profit before tax as per
the books of accounts, excluding profits arising from branches outside India.
Promotion of education Gender equity and women empowerment Eradication of
extreme hunger and poverty Reducing child mortality and improving maternal
Health Combating HIV-AIDS, malaria and other diseases Environmental
sustainability Employment enhancing vocational skills Contribution to Prime
Minister’s relief fund and other such state and central funds Social business
projects And such other matters as may be prescribed List of activities under
Schedule VIIHandbook on Corporate Social Responsibility in India 13 guidelines
to be followed by companies while developing their CSR programme.
The CSR committee will be responsible for preparing a detailed plan on CSR
activities, including the expenditure, the type of activities, roles and
responsibilities of various stakeholders and a monitoring mechanism for such
activities. The CSR committee can also ensure that all the kinds of income
accrued to the company by way of CSR activities should be credited back to the
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community or CSR corpus.

BUSINESS RESPONSIBILITY REPORTING

The other reporting requirement mandated by the government of India, including
CSR is by the SEBI which issued a circular on 13 August 2012 mandating the top
100 listed companies to report their ESG initiatives. These are to be reported
in the form of a BRR as a part of the annual report. SEBI has provided a template
for filing the BRR. Business responsibility reporting is in line with the NVG
published by the Ministry of Corporate Affairs in July 2011. Provisions have also
been made in the listing agreement to incorporate the submission of BRR by the
relevant companies. The listing agreement also provides the format of the BRR.
The BRR requires companies to report their performance on the nine NVG
principles. Other listed companies have also been encouraged by SEBI to
voluntarily disclose information on their ESG performance in the BRR format.

THE RELEVANCE OF CSR WITHIN AN ORGANIZATION

CSR is not only relevant because of a changing policy environment but also
because of its ability to meet business objectives. Undertaking CSR initiatives and
being socially responsible can have a host of benefits for companies such as
the following:
► Strengthening relationships with stakeholders
► Enabling continuous improvement and encouraging innovation
► Attracting the best industry talent as a socially responsible company
► Additional motivation to employees
► Risk mitigation because of an effective corporate governance framework
► Enhanced ability to manage stakeholder expectations These benefits are
important and most companies that are engaged in CSR are revisiting their
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strategies and expanding their operations to reap enhanced benefits and contribute
to inclusivity in growth.

Notable Work by Some Companies

Ashok Leyland
Operates a FunBus in Chennai and New Delhi. This bus, equipped with a
hydraulic lift,
takes differently abled children and those from orphanages and corporation
primary
schools on a day‟s picnic. The company also runs AIDS awareness and prevention
programmes in its Hosur factories for about 3.5 lakh drivers.

Axis Bank
The Axis Bank Foundation runs Balwadis which are learning places for children
living in large urban slum clusters. It also conducts skill development programmes
(PREMA and
Yuva Parivartan) in motor driving, welding, mobile repairing, tailoring etc, for the
youth in backward districts.

Bharat Petroleum Corporation

Its rain water harvesting project Boond, in association with the Oil Industries
Development Board, selects draught-stricken villages to turn them from „water-
scarce to water-positive‟.

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Some of BPCL‟s other social programmes include adoption of villages,
prevention and care for HIV/AIDS and rural health care.

Hindalco Industries
Its CSR activities are concentrated in 692 villages and 12 urban slums, where it
reaches out to about 26 lakh people. It has constructed check dams, ponds and
bore wells to provide safe drinking water. In education, it awards scholarships to
students from the rural schools it support. Its other interests include women‟s
empowerment and health care, in which it treats patients in hospitals, runs
medical camps and operates rural mobile medical van services.

Indian Oil Corporation

It runs the Indian Oil Foundation (IOF), a non-profit trust, which works for the
preservation and promotion of the country’s heritage. IOCL also offers 150 sports
scholarships every year to promising youngsters. Some of its other initiatives lie
in the domains of clean drinking water, education, hospitals and health care. -16-

Infosys
The Infosys Science Foundation, set up in 2009, gives away the annual Infosys
Prize to honour outstanding achievements in the fields of science and engineering.
The company supports causes in health care, culture and rural development. In an
interesting initiative undertaken by it, 100 school teachers in Karnataka, who were
suffering from arthritis, underwent free surgery as a part of a week-long
programme.

Mahindra & Mahindra

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Nanhi Kali, a programme run by the KC Mahindra Education Trust, supports
education of over 75,000 underprivileged girls. The trust has awarded grants and
scholarships to 83,245 students so far. In vocational training, the Mahindra Pride
School provides livelihood training to youth from socially and economically
disadvantaged communities.
M&M also works for causes related to environment, health care, sports and
culture.

Oil & Natural Gas Corporation

It offers community-based health care services in rural areas through 30 Mobile
Medicare
Units (MMUs). The ONGC-Eastern Swamp Deer Conservation Project works to
protect the rare species of Easter Swamp Deer at the Kaziranga National Park in
Assam. ONGC also supports education and women empowerment.

Tata Consultancy Services

Its Computer Based Functional Literacy (CBFL) initiative for providing adult
literacy has already benefitted 1.2 lakh people. The programme is available in nine
Indian languages.
Besides adult education, TCS also works in the areas of skill development, health
care and agriculture.

Tata Steel

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It comes out with the Human Development Index (HDI), a composite index of
health, education and income levels, to assess the impact of its work in rural areas.
Health care is one of its main concerns. The Tata Steel Rural Development Society
aims to improve agricultural productivity and raise farmers‟ standard of living.

Prospects of CSR in India:

Chahoud et al. (2007) suggested that integrating a complete ‘social perspective’
into allaspects of operations will maximize true value and benefit for
organizations in India, while protecting the huge investments companies make in
corporate brands. Engaging with thesurrounding communities will secure a
reputation that can further establish the business besides creating good human
capital that can serve the business (Arora and Puranik, 2004). .On the other hand,
Banerjee (2007) argued that the role of business is to create wealth by providing
goods and services and the pursuit of social goals will actually dilute businesses’
primary purpose. Besides, Smith (1976) mentioned, CSR behaviors will reduce
economic efficiency and profit and will imposes additional costs which will
reduce the organization’s competitiveness in the local market. Maheshwari (2010)
added to the prospects of CSR in India that organizations can easily improve its
corporate image and product positioning through CSR and thereby gain a high
market share. On the other hand, a note of caution about this came from Husted
and Allen(2007) as they argued that the social responsibility does not come from
the company, but from the people in charge of it and thus, without meaningful
ethical and academic education, mass introduction of CSR can’t be successful.
While describing the feasibility of CSR in India, Dr. Pandey (2008) highlighted
that Indian government provides different opportunities such as tax reduction and
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redemption, easy loan etc. to the organizations that are committed to social
responsibility. For example, corporate donations of social welfare projects of
approved NGO’s are exempted from income tax in India. This is because the
government has understand that it is nearly impossible to achieve the vision of
India becoming a super power unless some hard core fundamental work is done
amongst the under privileged class with the help of business organizations and
they are brought into the mainstream of production and contribution to the GNP.
The Indian government has even opened a CSR support center in Chennai to build
knowledge, provide training and support CSR initiatives (Anonymous,2010).
Corporations in India which are keen to avoid interference in their business
through taxation or regulations can take substantive voluntary steps and can
persuade government sand the wider public that they are taking current issues like
health, safety, diversity or environment seriously and so avoid intervention.
According to Cheung et al. (2009), CSR helps the firms seeking to justify eye-
catching profits and high levels of boardroom pay. However, Zerk (2006)
mentioned an important note here that the government should keep the regulation
to a minimum since regulation creates barrier to market entry for new
organizations. Crane, Matten and Spence (2008) stated that the multinational
organizations operating away from their home country can make sure that they
stay welcome in India by being good corporate citizens with respect to local labor
standards and impacts on the environment. Corporate Social Responsibility can be
used as an important aid to recruitment and retention within the competitive
graduate market for Indian organization (Ontiveros, 1986). Potential recruits are
increasingly curious about an organization’s CSR policy during selecting where to
apply. CSR can also help to build a 'feel good' atmosphere among existing staff,
particularly when they can become involved through payroll giving, fundraising
activities or community volunteering. Crowther and Rayman-Bacchus (2004)
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highlighted in the same context that the financial benefits of CSR must outweigh
the costs, in the long run at least, to ensure that CSR engagement is financially
sustainable. Besides monitoring, certification and reporting is crucial for the
credibility and reliability of CSR activities in the local infrastructure. However,
Margolis and Walsh (2003) concluded in their study that market outcome of CSR
is still inconclusive.

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