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Purpose – The purpose of this paper is to illustrate the use of a post hoc predictive segmentation procedure to find out the variables that are the most important predictors of investor's preference for specific financial investment products. Design/methodology/approach – The study considers various demographic, socio-economic and psychographic variables for the purpose of understanding the investor's preferences. Using a sample of individual investors (n=377), a classification and regression tree (CART) methodology was used to determine whether psychographic variables were better predictors than demographic and socio-economic variables for understanding an individual investor's preference for the investment alternatives. Findings – The results showed that psychographic variables emerged as the most important predictors in the case of investment products with greater degree of risk, and the demographic and socio-economic variables emerged as the most important for the investment instruments with lesser degree of risk. However, when the sample was divided based on occupation profile (government and non-government), for both the fixed returns based instruments and the non-fixed instruments, psychographic variables emerged as the most important predictors. Practical implications – These results show the need for financial service providers to consider the psychographic variables along with demographic and socio-economic variables, so as to better understand and advise the financial consumers. This would enable the financial service institutions to target their audience more sharply, so as to develop appropriate marketing strategies and further build the investor's trust. Originality/value – This paper is a first of its kind to empirically identify the most important variable that determines the financial consumer's preference for investment products in India, using CART technique. This study contributes to furthering the understanding of investor behavior.
Corporate Social Responsibility-
Impact and outcome Approach: Emerging Challenges*
Corporate Social Responsibility refers to business responsibility to community in response to
environmental, social, ethical and economic concerns. The study relates to the concept and practices
of CSR, changing structure of such spending and raises certain issues and challenges arising from
such practices. The paper is divided into four parts. The first part presents examples of certain
aberrations like, socio-economic inequality, lagging human development indicators, pollution and
environment degenerations necessitating the need for CSR. Since CSR involves relocation of
resources from private to public bodies for environmental and social benefits to integrate with the
organisational core business. This is the subject matter of part two and presents, in brief, meaning and
significance of CSR for organisations and employees. Part three lists three different approaches
towards CSR contribution, discusses the mandatory system of CSR contribution in India and presents
the practices of contribution by various business houses and agencies abroad and India. The changing
practice of CSR spending, as it has moved corporate social activity from the fringes to the forefront or
boardrooms, or its linkage to impact and also certain issues arising therefrom are the subject matter of
part four. Summary and Conclusions are presented at the end.
Economies are developing but there are certain aberrations like socio-economic inequality, lagging
human development indicators, environment degeneration, Various socio-economic parameters
impinging growth of an economy, in particular, developing economy, include:
Spending on Research & Development in India as a percentage of GDP is only 0.6 of which
two-third is spent by government. For China, the corresponding percentages are 1.83 and 10;
and for USA are 2.8 and 10 (Tadit Kundu 2018)1
As regards medical care2, India has only 1.7 trained allopathic doctors and nurses per 1000
population compared to 2.5 WHO recommended guidelines
Bed density in India in 2002 was 0.67 per 1000 population with the global average of 2.6 and
WHO benchmark of 3.5. India requires about 6 – 7 lakh of additional beds over the next 5-6
years requiring an investment of US $ 25 – 30 billion
Share of private spending on medical care in India is about three -fourth and only a fraction is
covered by insurance
1Dr. Nand L. Dhameja, Professor, FMS Manav Rachana International Institute of Research
and Studies
Tadit Kundu (2018), Learning from China’s rise in Higher Education, (MINT August 6)
2 Palash Mitra and Mandar Vaidya: India Healthcare: Inspiring possibilities challenging Journey,
(McKinney & Co. Confederation of Indian Industries (CII) December, 2012)
As regards higher education, India has about 800 universities and about 6 lakh colleges;
general enrolment ratio (GER) for higher education is only 25 while for China and other
countries, the GER is more than twice this figure.
In the list of world top 500 higher education institutions, India has only 9 institutions, the
corresponding figures for China is 22.
Similarly, as regards, research impact reflected by Published Research Metrics (1996-2007),
there were only 12.64 million citations with an H Index of 521 for India, the corresponding
figures for China were 39.24 million and 712, respectively (Tadit Kundu 2018)3 .
Pollution, releasing of harmful contaminants into environment causing instability and harm to
eco system, is, an unwanted change in environment which involves the physical, biological
and chemical changes involving air, water and land having effects on human life in one way
or the other. Pollution in any form like noise, water and air has become a serious issue in
developing countries after WW II due to rapid industrialisation and lack of regulations, and it
is the root cause of many diseases that kill and disable living organism.
Air pollution has significant health impacts that have increasingly been becoming major
environmental challenges. Burning of crop residue is one reason for worsening of air quality
in Punjab, Haryana, Uttar Pradesh, and Delhi NCR and financial assistance for agricultural
mechanisation has been a step towards improvement of air quality. As an example, to control
air pollution, government took a decision to leapfrog from BS-IV to BS-VI fuels4.
Large-scale deforestation, mining and construction have been continuing unabated hurting the
ecology of Western Ghat spread over six states namely, Gujrat, Maharashtra, Goa, Karnataka,
Tamil Nadu and Kerala. As a result, 56,825 sq km of ‘ecologically sensitive area’ could not be
earmarked as ‘no go’ zone for polluting activities and deforestation- a prerequisite to save the
region from constant environmental degradation 5.
Cigarette butts are among the most abundant types of human produced garbage in the world’s
oceans as plastic based filter made of cellulose acetate has been found to affect sea birds and
sea turtles 6. Oil spills, chemical manufacturing, diamond mining, agriculture and fishing are
other examples having detrimental effects on environment. (Dhameja Oct-Dec. 2016)7
3. Tadit Kundu (2018), Learning from China’s rise in Higher Education, (MINT August 6)
H index, or Hiresch index measures the research impact of a scientist or an institution or a journal. A
scientific contributor with an index of h has published h papers, each of which has been cited in other
papers at least h times)
4 . Sanchita Sharma, Air Quality in North India to be better this winter than 2017 (Hindustan Times,
August 27, 2018)
5 . Wishva Mohan (2018), Failure to Stop degradation of western ghat worsened Kerala (Aug 27,
6. Cigarette butts one of the biggest ocean pollutants (2018) (Times of India September 4; p 15)
Increasing population is demographic advantage, but as a result of geographical diversity and
increasing dependency ratio from 100: 193 in 1951 to 100: 223 in 2001 to expected 100: 223
in 2040 is alarming. (Ajai Sreevatsan, 2018)8
From above socio-economic aberrations, one may ask,
Who is responsible for all these?
How can these be mitigated?
What are the approaches for such mitigation?
What has been the practices in India and abroad in carrying activities towards philanthropy or
development of society and what has been the changing scenario of such practices?
What are the issues and challenges for such practices in future?
Before we attempt to address the above issues, and discuss contributions by certain business
organisations or others towards economic and social development, let us briefly discuss the meaning
and significance of CSR.
CSR meaning and significance:
CSR has been defined differently by various authorities. Definition by UNIDO is all inclusive and it
goes as
“CSR is a management concept whereby companies integrate social and environmental concerns in
their business operations and interactions with their stakeholders. CSR is generally understood as
being the way through which a company achieves a balance of economic, environmental, and social
imperatives (Triple-Bottom-Line Approach) while at the same time addressing the expectations of
shareholders. In this sense it is important to draw a distinction between CSR, which can be strategic
business concept and charity sponsorships or philanthropy. Even though the latter can also make a
7. Dhameja Nand (Oct-Dec. 2016) Corporate Social Responsibility Initiatives: Practices and Issues ,
( Indian Journal of Public Administration, Vol. LXIII. No. 4. Oct-December, 2016)
8. Ajai Sreevatsan, 2018, India may become old before it has a chance to become rich, (Mint July 11,
valuable contribution to poverty reduction, will directly enhance the reputation of a company and
strengthen its brand, the concept of CSR clearly goes beyond that” (UNIDO)9.
As against the above, Business Dictionary defines CSR as "A company’s sense of responsibility
towards the community and environment (both ecological and social) in which it operates. Companies
express this citizenship (i) through their waste and pollution reduction processes, (ii) by contributing
educational and social programmes and (iii) by earning adequate returns on the employed
CSR is termed as “Triple-Bottom-Line-Approach”, i.e. to help the company promote its commercial
interests along with the responsibilities it holds towards the society at large. CSR is different and
broader from acts of charities or philanthropic activity as the latter is merely a superficial or surface
level action as part of business strategy, while the former tries to go deep and address longstanding
socio-economic and environmental issues.
CSR based on Triple Bottom Line (TBL) Approach encourages companies and institutions to align
their activities in a socially, economically and environmentally viable way which is helpful to
developing countries to achieve Sustainable Development Goals (SDGs) in the long run.11
As such, CSR involves relocation of resources from private to public bodies for environmental and
social benefits and thus integrates organisational core business with social and environmental
concerns of the community; so as to provide impetus to economic development and to improve the
living standard of the people. In other words, private individuals or agencies work for the betterment
of society by undertaking various activities or functions so as to mitigate social evils, though
government always remains as a facilitator12.
CSR is beneficial to the company, to the society as well as employees as:
Benefits to corporations from CSR include:
9. http:/// csr-htm/#pp1{g1}/0/
United Nations Industrial Development Organization,
responsibility-market-integration/what-csr (March 13, 2018).
10 ‘Definition of CSR’ Retrieved’ September 4, 2014 as reported in Wikipedia, Corporate social
responsibility, ibid
11 . UNIDO, Ibid
12 . Dhameja Nand , (2016), ibid.
BO OSTS EMPL OYEE ENGA GEME NT AS I T helps to attract and retain productive
CSR has been found to be beneficial to employees because of:
PO SITIVE WO RKPLA CE ENVIRONMENT: BY Instilling a strong culture within
every employee, the workplace becomes a positive and productive environment where
employees can thrive.
CSR Approaches13, 14
CSR has been used differently in various countries; even in European countries the discussion about
CSR is very heterogeneous. All the approaches followed could be categorised under three broad heads
CSR as Corporate Philanthropy
CSR as Value Creation
CSR as Risk Management
CSR enactment in India
Certainly, there have been philanthropic contributions by various agencies and business houses.
Approaches of such contributions vary among countries. Such contributions are voluntary in western
countries while India is the only country where such contribution is mandatory for certain profitable
business organisations. As per the law enacted in April 2014, every company with a net worth of Rs.
500 crore or more, or turnover of Rs. 1,000 crore or more, or net profit of Rs. 5 crore or more in a
financial year will have to contribute 2 percent of the average profit of the last three years towards
corporate social responsibility (CSR) in various areas clubbed under 11 broad activities.
CSR activities can be carried out by companies in any of the following ways:
By setting up a Trust or Society (under Section 8 of the 2013 Companies Act) under its
direct administrative control.
13. Tilcsik, A. and Marquis, C. (2013).’Punctuated Generosity: How Mega-events and Natural
Disasters Affect Corporate Philanthropy in U.S. Communities’ Administrative Science Quarterly,
58(1): 111-148, as reported in Wikipedia, Corporate social responsibility
14. Dhameja Nand, (2016), ibid, see for details and illustration of these approaches
Outsource the CSR tasks to established social enterprises- institutions engaged in CSR
activities for 3 years or more. These institutions are meant to engage in not for profit
Collaborate with fellow companies and work out some arrangement based on the CSR
Certain rules are to be followed in carrying out CSR activities, these include:
Any familial activity or act of personal charity is not to be included as part of CSR
Contribution-fiscal or otherwise to political organizations is outside the purview of CSR
All CSR activities are to be conducted in Indian territory
Listed public companies are mandated to have up to 3 directors as part of their CSR
Committee- one of whom should always be independent, while unlisted and private
companies are allowed to have at least 2 directors and no independent director.
CSR reports are to be compulsorily published on an annual basis. The reports have a fixed
format as designed by the CSR rules, which must include details like, official CSR policy,
the number of funds dedicated to CSR and its detailed utilization as well as a detailed
explanation for non-utilization of funds, if any. The said format and its constituents must
be displayed on the official website of the company.
Trusts created by companies to carry out their mandated CSR tasks, are to be
compulsorily registered
Companies are allowed to co-operate with their independent counterparts, provided the
latter has a proper tracking and reporting system for CSR activities that may be
Companies are allowed to engage in capacity building by allotting up to 5 percent of all
expenses to be incurred on CSR activities.
However, following activities that cannot be considered as CSR:
Operational and administrative activities of the business.
CSR activities that do not take place in Indian territory.
Employee and familial welfare activities
Fiscal help rendered to political outfits
Events like the marathon, award functions, fiscal help rendered to charitable institutions,
sponsoring TV shows etc that are strict “one-off”-i.e. meant to happen just once in a while
Lawful duties rendered under acts or regulation like Labour Act, etc
As against the above, there is view that objective of a business enterprise is to maximise profit in the
interest of its shareholders, they should not be expected to contribute towards CSR as they don’t have
expertise in CSR. In the words of economist Milton Friedman15, "there is one and only one social
responsibility of business - to use its resources and engage in activities designed to increase its
profits ..." He argued that corporations are tasked to make money. They cannot be responsible, as this
is the domain of individuals. The only responsibility of business is to make money and to distribute
this money to their shareholders. He also argued that corporations do not have the skills to know how
to alleviate poverty, educate the uneducated, and empower women. Instead, they know how to
produce goods and services at the lowest cost possible, and sell them for the highest price possible. In
many cases, these very activities are at odds with CSR, such as paying people low wages on
temporary contracts with poor long-term benefits.
As against the above mentioned alarming socio-economic parameters impacting nation’s
development, there are ample examples of business houses world over contributing towards the
development of societies.
Business houses contributions towards society Abroad:
In a recent example, Alibaba’s Jac Ma, China’s richest man, has announced his plan to
step down from the Chinese e-commerce giant worth $ 420 billion on September 13th, his
54th birthday to pursue philanthropy in education.
Walmart Foundation, besides small donations in the communities where it operated,
has over 990 of charitable organizations that have big plans for advancing job
mobility and economic opportunity by investing in work skills and career readiness
15 Milton Friedman, ‘Capitalism and Freedom’. (1962), The University of Chicago Press, Chicago
Most of the major universities like Harvard, Stanford, Yale, and Oxford have been set up
by philanthropic funds. They raise funds from several sources and are aggressively
seeking philanthropic funds. They use bait such as naming important buildings after major
donors after offering donors honorary degrees and so on
As an example, Stanford University was founded in 1885 by California Senator Leland
and his wife Jane Stanford in the memory of their only child Leland Stanford Jr. who died of
typhoid fever at the age of 13 years, “to promote the public welfare by exercising an influence on
behalf of humanity and civilization.” They decided to build a university as the most fitting memorial,
and deeded to it a large fortune that included the 8,180-acre Palo Alto stock farm that became the
campus. They made their plans just as the modern research university was taking form.
Looking at the example of Microsoft, its CEO of Satya Nadella, said,
“Everywhere we operate, we focus on contributing to local communities in positive ways—
helping to spark growth, competitiveness and economic opportunity for all."
Microsoft CSR has the mission to empower every person and every organization on the planet
and to use technology, grants, employees and voice to improve people’s lives by enabling
access to the benefits and opportunities that technology offers.
Some details of CSR at Microsoft include:
The company donated more than $1.2 billion in software and services in fiscal 2017, helping
non-profits around the world get the technology and skills they need for today’s digital
Since 2016, the company has donated more than $1 billion in cloud services to more than
90,000 non-profits and university researchers achieving over $1 billion milestone a year
early — and announced a new plan to more than triple the number of non-profits and to reach
to 300,000 over the next three years.
Employees raised a record-breaking $142 million through the employee giving program in
The company ensured that the products and services are accessible to meet the needs of all
customers, including the more than 1 billion people around the world with disabilities.
Examples included the new Eye Control feature in Windows 10 for people with ALS,
and Seeing AI, a free app on iOS for blind and low vision users that narrates the world around
Partnering with telecommunication companies through the Rural Airband Initiative to bring
broadband connectivity to 2 million people in rural America by 2022, helping to close the
rural broadband gap for the more than 20 million Americans living in rural communities who
lack access to the economic, educational and health opportunities the internet provides.
As a multinational corporation, the company has both a substantial opportunity and a high
responsibility to ensure that technology’s benefits reach people more broadly across our
global society and economy. Everywhere the company operates, it focuses on contributing to
local communities in positive ways helping to spark growth, competitiveness and
economic opportunity for all.
CSR contributions and its disclosure in the US16 are as:
Corporations contributed $ 17.8 billion to charities during 2017
55% of consumers were willing to pay more for products from socially responsible
65% of Fortune 500 companies offered matching gift programs.
93% of the world’s largest 250 companies publish annual CSR reports
A survey of people in 15 countries sheds light on which companies are seen as the most socially
responsible in 2017. An analysis of 170,000 company ratings from respondents in 15 countries sheds
light which are perceived by consumers as the most socially responsible. The annual study17 compiled
by the Reputation Institute (RI), a Boston-based reputation-management consulting firm tracks social
responsibility reputations by zeroing in on consumers’ perceptions of company governance, positive
influence on society and treatment of employees, scoring each with its proprietary RepTrak Pulse
system. Companies in the descending order of Rep Trak Pulse system points are as under:
16. Matching
Gift and Corporate Giving Statistics (updated August, 2018
17 . The 10 Companies with The Best CSR Reputations In 2017.
reputations-in-2017/#601 Karsten StraussForbes Staff
No. Company Rep Trak
Points (in
1 Lego 74.4 In terms of RI's analysis, Lego beat all other companies in
the perception that it behaves ethically, conducts business
fairly, operates transparently, protects the environment and
supports worthy causes.
2 Microsoft 74.1 fosters perceptions of good citizenship and good governance
3 Googles 73.9 How people evaluate companies in general, has become more
critical as they are more familiar and they are more educated.
4 Wait Disney
6 Intel 71.1
7 Robert
8. Cisco
9 Rolls-Royce
10 Colgate-
Philanthropic activities undertaken by business houses in India:
In India, large- scale philanthropic activities were undertaken by business houses to build some of
India’s finest institutions. For example, Sir Ratan Tata Trust (SRTT) established in 1919, and The Sir
Dorabji Tata Trust established in 1932, provide grants and partners with organisations that engage in
innovative and sustainable initiatives in the areas of education, health, civil society and governance.
Some of the Institutes of national importance promoted by Tata Trusts include, Tata Institute of Social
Sciences (1936), Tata Memorial Hospital (1941), Tata Institute of Fundamental Research (1945),
National centres for Performing Arts (1966), Tata Institute of Advanced Studies (1988). Tata Sons
spent about Rs 750 crore during 2015-16 on various philanthropic activities and Institutions.
Similarly, Birla companies have contributed to non-government organisations (NGOs) and to their
own trusts to run various educational, health care institutions, Birla Institute of Technology and
Sciences, Pilani, set up 1964 by G. D. Birla is an example. G. D. Birla founder of Birla Group,
espoused the trusteeship concept of management, which entails that the wealth that one generates and
holds, is to be held as in a trust for our multiple stakeholders. This means investing part of profits
beyond business, for the larger good of society, and this is CSR
The philosophy of Trusteeship’ has been followed over generations in Birla Group. Accordingly,
Aditya Birla, weaved in the concept of 'sustainable livelihood', which transcended cheque book
philanthropy. In his view, it was unwise to keep on giving endlessly. Instead, he felt that channelizing
resources to ensure that people have the wherewithal to make both ends meet, would be more
productive. In the words of Aditya Birla, "Give a hungry man fish for a day, he will eat it and the next
day, he would be hungry again. Instead, if you taught him how to fish, he would be able to feed
himself and his family for a lifetime."
Taking these practices forward, Aditya Birla’s successor. Kumar Mangalam Birla, institutionalised the
concept of triple bottom line accountability represented by economic success.
According to the Annual Report18, the Group spends in excess of Rs.250 crore annually, inclusive of
the running of 20 hospitals and 56 schools and is spread-out to 5000 villages globally reaching out 7.5
million people annually, of which 60 percent live below poverty line and belong to scheduled casts
and scheduled tribes
The focus area is rural development to help build model villages covering activities span five key
areas namely:
Healthcare and family welfare
Social causes
Infrastructure development
Sustainable livelihood
CSR Spending in India
As per the data released by the Ministry of Corporate Affairs, since the enactment of CSR rules in
2014, Rs 9,553.72 crore was spent towards CSR activities during 2014-15, and this increased to Rs.
13,625.24 crore by 7983 companies for the year 2015-16. However, there was penal action against
187 companies for violating CSR norms in 2014-1519.
Saurabh Kumar20 in his blog on Corporate Social responsibility under the Companies Act stated that
there is a marked improvement on CSR spending in 2017 as defaulter of CSR data has reduced from
18 Birla Group Annual Report (2017)
19 Economic Times Corporate Trend, December 18, 2017
20 . Saurabh Kumar, Corporate Responsibility under Companies Act, June 28, 2018
hhttp://www.echovime in/blog/corporate-social-responsibility-activities-top-brands/Microsoft/
44 percent in 2016 to 36 percent in 2017; similarly, there has been increase in CSR spending, and 33
percent companies have spent more than the mandated spending of 2 percent of net profit. However,
more than one-third of the companies have not complied with the CSR rules and release of data.
As per another estimate and analysis of CSR spending by top 10021 National Stock Exchange (NSE)
listed companies by market capitalisation, not much has changed in patterns of CSR spending. While
education and healthcare continue to attract most of the monies, Maharashtra still sees the maximum
inflow of CSR spends. The top 10 companies still account for almost half of the total CSR spend. As
per this estimate, in fiscal year 2017 (FY17), an actual spend for the top 92 companies, of which data
was available was Rs. 6,810 crore, these included 15 public sector units (PSUs) accounting for Rs.
1996 crore i.e. about 29 percent of the total.
Of these, top 10 companies had Rs 3,307 crore i.e. 50 percent of the total. According to Abhishek
Humbad, founder and chief executive officer of Good era, “The overall CSR spend growth has
reduced by 10% from that of the last year, primarily due to a). overall lower rate of growth of
companies’ profits and b). 16% of companies have reduced their overall spend, though their profits,
says Abhishek Humbad, founder and co-chief executive officer (CEO) of Goodera.
Public sector focus: For the year, 2017, PSUs spending on CSR decreased by 9%, though the
prescribed spend grew by 1%. This was mainly due to certain PSUs being non-compliant since the
law came into existence. Some of the common explanations for non-compliance were multi-year
projects, delay in identification of projects and other related delays, says Humbad.
One of the ways to improve the current situation was to invest in fewer but strategic projects instead
of taking up more projects. “On an average, while private companies take up 14 projects, the
corresponding number for PSUs is 26, which leads to thinning of resources and lack of adequate focus
on projects under PSUs.”
Perhaps one approach could be like that of NTPC Ltd, which ranked at No. 6 in the spend tally spent
almost half of its CSR budget was allocated to hunger, healthcare and poverty alleviation projects.
NTPC also took up most of the CSR activities primarily in the neighbourhood villages of its units too.
21 . Seema Chowdhry, How companies are spending on CSR projects
(October 17, 2017, LiveMint)
According to Ranjan Kumar Mohapatra, director human resources, Indian Oil Corp. Ltd (IOCL) 22,
public sector entities are generally at “an advantage” when carrying out CSR activities since they
don’t need to obsess over profit. CSR, has moved corporate social activity from the fringes to the
forefront or boardrooms. CSR activities are not a new thing, IOC has been involved with various
state government projects and initiatives especially in healthcare, education and skilling since its
inception in 1964 and CSR is a subset of sustainable development. Of late the focus is converting
waste to energy and plants each of a capacity of 5 tons/day have been set up at Varanasi and
Faridabad. Specialised technical education is another area of IOC focus, and Institute of Chemical
Technology (ICT)-IOC is being set up at Bhubaneswar in collaboration with ICT Mumbai and
students will be able to pursue integrated MTech courses in chemical engineering, executive MTech,
and PhD programmes.
Looking at new areas: As in the previous two years, in FY17, nearly half of the top 10 spenders
exceeded their prescribed limit. Tata Steel Ltd, ranked at No. 9, led the tally with a spending of almost
67% above its prescribed limit. “We do not look at 2% as a cut-off limit. The onus is on us to do more
nuanced and high-impact activities to bring in social change. This is built into the DNA of our
company,” says Biren Ramesh Bhuta, chief CSR officer at Tata Steel. He believes that more and more
companies in India are now incorporating sustainability practices and carrying out effective CSR
practices because that is the need of the day. “There are two compelling reasons: If you as a business
want to survive for 100 years, you have to do right by the society you work in and if you want to
grow, you cannot do so by leaving a large section of the society so behind,” he adds. Other top ten
contributors included, RIL, ONGC, TCS, HDFC, Infosys, NTPC, ITC, Tata Steel.
It may be mentioned that as against the actual spending of Rs. 6810 crore on CSR during 2017, the
figures for the years 2016 and 2015 were Rs. 6188 crore and Rs. 6151 crore, respectively. The
prescribed CSR contribution for the corresponding three years were Rs. 7388 crore, Rs. 6799 crore
and Rs. 6,151 crore respectively. This is reflected by the following Exhibit I
Exhibit I
22 . Haris Zagar, PSUs need to join forces to deliver big-ticket social projects, (Live Mint , Aug
Looking at the developments in CSR spending since 2014, the year it was mandated in India,
following observations can be made:
The actual CSR spending as percent of the mandated spending has increased over three years
from 82 percent in 2015 to 91 percent in 2016 , to 92 percent for the year 2017. However, the
rate of increase on actual CSR spending has reduced from 23 percent during 2016 to 10
percent during 2017.
Companies are moving beyond compliance to focus on creating a long-term impact for the
beneficiaries. “Many companies are proactively conducting extensive monitoring and
evaluation, and impact assessment for their projects and reporting these through CSR specific
detailed reports,” says Humbad of Good era. Similarly, for Infosys Foundation, the focus was
on processes and governance. In the words of Sudha Murty, Chairperson of Infosys
Foundation, “These have been tightened. Third-party impact assessment has been introduced
and is periodically reviewed for improvement. Reach has been expanded to other states where
Infosys Foundation does not have a presence,”
There are certain changes over the years. “The first two years there was struggle to get clarity
on how existing work should be aligned to CSR and how initiatives have to be taken that are
in conformity to the CSR schedule. In the third year (i.e. 2017), we found an improvement in
quality of proposals that are being developed and an increased interest to develop flagship
programmes that will give the companies greater visibility,” says Niraj Seth, executive
director (advisory services) at EY India.
This development is reflected not just in how the private sector is engaging with CSR but
PSUs too. As Indian Oil Limited (IOL) has taken many structural as well as procedural
interventions to strengthen the CSR process, has framed a CSR Policy and Guidelines to
streamline the execution, monitoring, evaluation and impact assessment of activities. Most of
its CSR activities are now being executed in project mode and CSR officials have been posted
in 31 key establishments and unit-level CSR panels have been constituted to conceive,
implement and monitor CSR projects; according to Kali Krishna, chief general manager
(corporate communications), IOC.
In this regard, Jayaram of KPMG adds that now the thought process is going beyond spend
allocation. To quote, “We see more detailed discussion around impact and very structured
process for monitoring and evaluation.”
Besides, looking at the impact assessment of CSR spending, experts and companies shared
some more learnings from doing CSR for three years. In the words of Sukthankar of HDFC
Bank, “This is our third year of CSR learning: While working in a specific geography, even
though we may have started with one project or one specific activity, when we identified
other areas of intervention that could make things better for the community, we saw value in a
more holistic approach.”
Ambasta of ITC believes organizations have figured out the nuances of the CSR Rules. “After
a slow start, companies have set their CSR policy, focus areas and implementation mechanism
in place. Most companies over the last three years are bound to have increased their CSR
spends till they at least touch the 2% target. This has and will positively impact as well as
address the developmental challenges that our country faces, including reduction in
Most of the CSR activities of Reliance Industries Limited (RIL)23 are carried out under the
aegis of Reliance Foundation (RF), set-up in 2010 under the leadership of Ms. Nita M.
Ambani. During the year 2017-18, the CSR initiatives focussed on seven areas with a total
expenditure of Rs. 771 crore which is above the required limit. (The average PAT for the three
years was Rs. 36,075 + 29,901 + 25,171 = 91,147; average Rs.30382). The CSR spending is
as under
23 Reliance Industries Limited, Annual Report 2017-18 (pp 164-179)
Amount Spent (Rs. crore) In percentages
Education 373 48.4
Rural transformation 195 25
Health 148 18
Sports for development 50
Disaster response 4
Arts, culture & heritage 1
Urban renewal -
Source AR 2017-18 (p 164-65)
The key philosophy of all the social development initiatives of the company is based on three core
commitments of Scale, Impact and Sustainability. The Reliance Foundation focuses on the social
initiatives with a three-pronged strategy:
oDirect engagement with the community;
oForging partnerships and collaborations at state and local government and non-
government agencies;
oLeveraging the power of information technology through Jio Infocomm
According to Kumar of Reliance Foundation, some companies look at an outcome-oriented
approach towards programme implementation and have accordingly been using various tools
and methods to assess its programmes from time to time.
Issues for consideration
As discussed above, various socio-economic parameters impinging nation development arise on
corporations working -whether profit making or not. As such, CSR contribution should be linked to
resources deployed rather than the profit earned. CSR contribution in relation to profit is rather
inequitable as it taxes efficiency by requiring profit making companies to contribute.
According to P R Ramesh24, Chairman of auditing, financial advisory and risk management firm,
Deloitte India, “It is an obligation of every organisation to give back to the community because
businesses use resources of the community and the don’t exist in isolation”. As such, CSR
contribution should not only by profit making companies, rather CSR expenditure should be a
percentage of revenue and not just profit.
Further, it is not only the incorporated enterprises, rather even the individuals should be made
responsible to contribute towards CSR. As such CSR should not be Corporate Social responsibility,
rather it should be Citizen Social Responsibility.
24 Moyna Manku, ‘CSR expenditure should be a percentage of revenue, not profit’, Mint, April 15,
Contribution towards CSR is by handful of companies, as discussed earlier, top ten companies
contributed about half of the total contribution for the year 2017, and such companies had been
contributing even before the enactment in 2014. As such, an objective of the enactment to bring a
change in the attitude of corporate institutions to give back to the society has not being achieved; and
there is a need to have a relook on the mandatorily requirement and also the procedure and
methodology of such contribution. Since there are companies which contribute more than the required
amount, should it not be incentivised? For example, Mindtree Ltd, the Bengaluru-based information
technology (IT) outsourcing company got the shareholders’ approval to spend up to 10% of net profit
on social cause. As such, with $88.4 million profit last year, the company plans to spend over 6.5
percent of its profit on social causes, which includes 2% spend on CSR and the 4.5% grants to
academic institution, i.e. set up a Mindtree AI (artificial intelligence) Chair at Stanford University25.
As there is requirement to identify, ‘Veg’ or ‘non-veg food’ by ‘Red’ or ‘Green mark’; Hallmark for
silver and gold jewellery, ISI mark for industrial products, and Agmark for agricultural products
certifying their respective purity26; and on every cigarette packet, there is a mandatory Health Hazard
Requirement, similarly, a system to reflect or otherwise observance or erosion of social values be
institutionalised. Examples of GAP, the San Francisco-based clothing company, Nike and many other
companies which faced widespread consumer backlash on their reported abusive labour practices
highlight the need to institutionalise such system rather than to leave it to the market forces.
Lastly, responsibility should not only be to spend but to indicate its ‘impact’ and ‘outcome’, though
some companies are proactively conducting extensive monitoring and evaluation, and impact
assessment of CSR projects initiated, in this regard, P R Ramesh27 raised the point that responsibility
should not be about CSR spending towards social works or about ‘outlays’, rather it should be about
‘outcomes’ of the spending, and the ‘impact measurement metrics system’ be in place that will
facilitate incentivisation of CSR spending
Summary and conclusions
CSR is an age-old concept and every enterprise has an obligation to give back to the community as it
uses nation resources. Working of an enterprise causes certain aberrations resulting in environmental
degeneration impacting nation’s growth. No doubt business houses contribute to address to the issue
of economic and environmental degeneration, such contribution involves relocation of resources from
private to public bodies. India is the only country where such contribution is mandatory for certain
profitable business enterprises. Analysis of CSR spending by top 100 NSE listed companies indicate
25 .Mindtree move to spend 10 percent profit on CSR spurs investors debate, (August 8, 2018)
26 . Bureau of Indian Stannard (BIS) is the national standard organization in India and it has laid
down Hall mark logo for jewelry, ISI mark for industrial products and Agmark for agricultural as an
indicator of their respective purity.
27 Moyna Manku, ibid
that not much has changed; that the contribution by top ten companies account for half of the total
contribution; education and healthcare attract most of the contribution, and that Maharashtra accounts
for the maximum CSR contribution.
The study concludes that:
Every enterprise should have the obligation to give back to the community for the resources
deployed, so CSR should be linked to the revenue, the practice of mandatorily relating to
profits amounts to taxing of efficiency; and every enterprise whether profit making or not,
should be required to contribute.
Further, it is not only the incorporated enterprise, rather even the individuals should be made
responsible to contribute. As such CSR better should be better known as Citizen Social
The enactment in 2014 was with an objective to bring a change in the attitude of corporate
institutions to give back to the society, as contribution so far is by a handful of the companies
which otherwise had been contributing, there is a need to have a relook on the mandatory
requirement and also the procedure and methodology of such contribution; as there are
companies which contribute even more than the required amount, such contributions should
be incentivised.
System that reflects or otherwise observance or erosion of social values be institutionalised
similar to that to identify veg’ or ‘non-veg’ by ‘red’ or ‘green’ mark; Hall mark logo for
jewellery, ISI mark for industrial products and Agmark for agricultural products; or for a
cigarette packet, a mandatory ‘Health Hazard Requirement’ Such system should be
institutionalise and not be left to market forces as in the cases of GAP, San Francisco-based
clothing company, and Nike which faced consumer backlash on their reported abusive labour
Lastly, CSR should not only to spend, rather emphasis should be on extensive monitoring and
evaluation and impact assessment system for CSR projects, as being practised by some
R Systems Annual Report 2016
R Systems, twenty-five years old company is a leading provider of product
engineering services, business process outsource services and also offers own
product suite in Manufacturing & Logistic vertical. The company has a CSR policy
that through its initiatives the company strives to provide equitable opportunities for
sustainable growth, thereby aligning with its goal to build R. Systems International
Limited into an organisation which maximises stakeholders value. The company
would engage in activities whereby business further contributes to make a positive
and distinguishing impact on environment, computers and other stakeholders.
With the average net profit for the last three financial years of Rs. 53 crore, the
company spent only Rs. 15 lakh on school education project in Army Public School,
Beas Kapurthala, Punjab, leaving a shortfall of Rs. 91 lakh.The reasons for the
shortfall in such CSR spending as, ‘the company is in continuous process of
exploring and evaluating new opportunities to increase the CSR expenditure to the
prescribed levels. As a sociably responsible company, the company stays committed
to increase its CSR impact over the coming years with its aim for maximum social
bearings” (p 83 AR)
Reliance Industries Limited (RIL) Annual Report 2017-18
Most of the CSR activities of Reliance Industries Limited (RIL) are carried out
under the aegis of Reliance Foundation (RF), set-up in 2010 under the leadership of
Ms. Nita M. Ambani. During the year 2017-18, the CSR initiatives focussed on seven
areas with a total expenditure of Rs. 771 crore which is above the required limit. (The
average PAT for the three years was Rs. 36,075 + 29,901 + 25,171 = 91,147;
average Rs.30382). The CSR spending is as under
Amount Spent (Rs. crore) In percentages
Education 373 48.4
Rural transformation 195 25
Health 148 18
Sports for development 50
Disaster response 4
Arts, culture & heritage 1
Urban renewal -
Source AR 2017-18 (p 164-65)
The key philosophy of all the social development initiatives of the company is based
on three core commitments of Scale, Impact and Sustainability. The Reliance
Foundation focuses on the social initiatives with a three-pronged strategy:
Direct engagement with the community;
Forging partnerships and collaborations at state and local government and
non-government agencies;
Leveraging the power of information technology through Jio Infocomm
Salient features of activities in above seven areas are as under:
oProviding quality education through 14 Reliance Foundation Schools
and also scholarship to 713 talented students to pursue higher studies.
Rural Transformation:
Livelihoods of 12 million farmers and livestock owners enhanced;
Eco-consistent soil conservationto bring in more than 7000 HHs of land
under sustainable agricultural practices
Water harvesting and conservation to bring in over 32,000 hectres of
land under irrigation
Over 73 billion litres of water harvesting capacity created
Over 7 million saplings planted to promote biodiversity
Over 44 million health consultations provided to patients through
Reliance managed hospitals and various health camps
Eye care services to over 1207 visually impaired individuals under the
Drishti Programme
Disaster Response:
Supported over 10,000 individuals from 22 flood affected villages
across Assam’s 11 districts
Helped over 0.15 million individuals from flood affected villages in two
districts of Gujarat and adopted four worst-hit villages for rehabilitation
Sports for Development
Reliance Foundation (RF) has scaled to over 10,000 schools across 34
cities through physical education programme
The RF Young Champs programme is supporting 48 talented young
football players through scholarships to home
Arts, Culture and Heritage:
Supported ‘8 Prahar’, an event dedicated to Indian classical music,
bringing together singers including Padma Vibhushan Sangeet
Martand Pandit Jasraj to delight music lovers in Mumbai
Supported the annual concert ‘Abbaji’ in the memory of renowed table
maestro, Ustad Allah Rakha Khan
Mint August 27, 2018 (p10)
Haris Zagar, PSUs need to join forces to deliver big-ticket social projects
Public sector entities are generally at an advantage when carrying out CSR activities
since they donot need to obsess over profits.
Four years of implementation: The rules have given a completely different
perspective to CSR, in the sense that it has moved corporate social activity from the
fringes to the forefront or boardrooms. There is now a greater understanding that
CSR alone is not in apposition to replace the government’s welfare activities, nor is it
supposed to. Companies are also in a better position to showcase or present good
CSR models.
Social vs sustainable: The world over, there is very thin gap between sustainability
and CSR. It is because, sustainability or sustainable development goals (SDGs)
almost encompass everything. Economist John Elkington says sustainability is
based on three Ps: People, Profit and the Planet. If we look at CSR, it is based on
people and the planet. So, it is really intertwined and we have to look at it that way. I
would rather say that CSR is a subset of sustainable development. There are long-
term sustainable initiatives. Since we are public sector, there are also government
driven initiatives like the Pradhan Mantri Ujjwala Yojna, under which LPG
connections are provided to women from BPL from BPL families, we will continue
supporting that.
A key area we are trying to focus on converting waste to energy- this is something
we have just started. We have set up three such plants, each with a capacity of
processing 5 tons/day, in Varanasi. One more plant is coming up in Faridabad.
Another area we are focussing on in a big way is collaborating with academic
institutions for specialised technical education. We tied up with the Institute of
Chemical Technology (ICT), Mumbai, to open the ICT-IOC campus in Bhubaneswar,
where students will be able to pursue integrated Mtech courses in chemical
engineering, executive MTech, and PHD programme.
CSR : Enforcement process
CSR a process of resource allocation from private to public bodies can be enforced
by government regulations requiring mandatory spending or by voluntary measures
which vary from country to country.
India is the only country where companies are required by law to contribute a a
certain percentage of profit towards a CSR under certain heads.
As discussed above, approximately half of the total contribution by top 100 NSE
companies is contributed by top ten companies and further, half of the total
contribution is spent in Maharashtra. As such, the total contribution by the all the
profitable companies is estimated as approximately Rs. 12,500 crore
“The CSR act, in spite of all its good intentions, has failed to cover a lot of ground. It has
given an impetus to companies to give back to the society, however, due to some policy
and procedural inadequacies, it has failed to set up a fool-proof method of imparting
CSR. Faulty criterions to determine the extent of money spent, fudging of data, selective
and self-serving CSR tasks or short-term money spending are some of the core
problems that India’s CSR laws and policy suffer from. Therefore, the need of the hour is
to change the CSR laws and amend it to become long-term, simple and easier to
monitor. CSR laws, with some tweaks, will greatly help the society in the near future”
Corporate Social Responsibility under Companies Act
June 28, 2018 Saurab Kumar
In this article, saurabh kumar discusses the CSR Laws in India.
... To meet the objective of the present study, only people having the capacity to save in various instruments were considered significant for the study (Sahi et al., 2012;Gupta, 1991). The study was conducted in the city of Allahabad, located in the State of Uttar Pradesh, India. ...
... Further, when it comes to financial details, respondents do not necessarily reveal the related information. Therefore, only those respondents who showed interest to participate in the study were contacted, and for this reason, also, non-probability-based sampling was considered most appropriate (Sahi et al., 2012). ...
... To meet the objective of present study, only people having capacity to save in various instruments were considered significant for the study (Sahi et al., 2012;Gupta, 1991). The study was conducted in Allahabad, a city located in State of Uttar Pradesh, India. ...
... Further, when it comes to financial details, respondents do not necessarily reveal the related information. Therefore, only those respondents who showed interest to participate in the study were contacted, and for this reason also, non-probability based sampling was considered most appropriate (Sahi et al., 2012). ...
Full-text available
In this study an attempt is made to investigate the factors that influence financial satisfaction of an individual. Focusing on Tier-II city of India, the purpose of present study is to examine the influence of financial knowledge and financial socialization on financial risk attitude and thereby on the financial satisfaction of an individual. The authors have borrowed and modified scales from literature on financial knowledge, financial socialization, financial risk attitude and financial satisfaction to create a questionnaire. The same has been distributed to respondents belonging to a tier II city of India. The mediated regression analysis was performed on hypothesized relationships after having analyzed the reliability and validity of the scales. Significant positive relationships are found between financial knowledge and financial risk attitude and financial satisfaction. The relationship between financial socialization and financial risk attitude and financial satisfaction are also found to be significantly positive. Financial risk attitude is observed to bear a mediating affect between financial knowledge and financial satisfaction, as also between financial socialization and financial satisfaction. This research is an attempt to develop a framework for financial satisfaction in a developing country, aimed at the most vulnerable economic class. It is based on data from India, and the results have been found to be significant.
... Also, Jagannathan and Kocherlakota (1996) show age as an important factor for participation in the stock market. According to Sahi, Dhameja and Arora (2012), psychographic factors emerged as the most significant factors for predicting Indian investors preferences. ...
... During the period of financial crisis, the stock market reveals contradictory observations related to assumptions of standard finance (Nigam et al., 2018) . It is also observed that decision-making for risky investments is more influenced by psychographic variables (Sahi et al., 2012). Liu et al. (2020 have established that investor's sentiments such as bad mood and anxiety make the investor risk averse, which consequently affects the return on assets. ...
Covid‐19 has impacted the financial markets dramatically. The risk and return expectations of investors have changed, leading them to reallocate their portfolios. This paper aims to analyse the impact of Covid‐19 on the portfolio allocation decisions of individual investors. The study examines the perceptions of investors about various investment avenues before and during the period of extreme uncertainty caused by the COVID‐19 pandemic. The data were collected from individual investors residing in Delhi and Mumbai. AHP is used to rank the investment preferences of the respondents. The results show that due to the present financial crisis pertaining to COVID‐19, investors have started reallocating their portfolios. Since the returns on risky assets are not as expected, investors are moving towards a conservative portfolio. However, the case of transition from risky to risk‐free assets is not the same in the case of all investors.
Purpose The purpose of this paper is to examine the relationships between financial knowledge, socialization and financial satisfaction with financial risk attitude and financial behavior as a mediator after demonetization and introduction of GST. Design/methodology/approach The sample consisted responses of 286 individuals from the city of Allahabad, Uttar Pradesh, India and making financial decisions for the household for at least last two years. The data were analyzed using exploratory factor analysis and mediation regression analysis. Findings All sub-scales used to measure constructs had satisfactory reliabilities and internal consistencies. It was found that financial risk attitude and financial behavior both mediate the relationship between financial socialization and financial satisfaction as well as between financial knowledge and financial satisfaction. Research limitations/implications This research is based upon survey method and voluntary participation. Hence one can question generalization of findings to larger samples. Moreover, the study is limited to a restricted geographical region which could affect the generalization of findings. Practical implications Results provide insights into the antecedents of financial satisfaction of individuals from tier II city of India. Financial planners may utilize this study for enhancement of financial satisfaction of their clients and hence retention of the same. Originality/value A majority of researchers use survey without evaluation validity of instruments in the selected context and sample. This research contributed to the literature and practice by testing validation of constructs of financial satisfaction in India.
Traditional finance theory is based on the principle of maximization of utility and explains how choices are made by rational people. Although the theory provides numerous insights, observation of actual behavior of people was seen to be different from what the theory predicted. The homo economicus is in reality a homo sapien who has emotions and beliefs that help to filter the content from his or her environment. These beliefs and preferences that arise due to cognitive limitations, presence of emotions, and various psychological motives guide or bias his or her decisions. Much literature states that the biases should be corrected as they negatively impact financial behaviour and individual's well-being. However, evolutionary psychology considers biases as design features of human mind. Thus, biases are not always bad, as at times, these biases can help the individual investor to choose the best course of action from the multiple possibilities and enable committing the less costly mistakes, thereby helping the individual to achieve satisficing behaviour. This paper aims to explore the investor biases and see whether they are related to the financial satisfaction of the individuals. Financial satisfaction is the measure of satisfaction with one's financial situation. The results showed that overconfidence bias, reliance on expert bias, and self-control bias have a positive and significant association with financial satisfaction levels. Association of a few other biases with financial satisfaction was also observed under certain control conditions. This study provides further insights on investor behavior and paves the way for various possibilities for future research.
Full-text available
The problem of adaptation of children and adolescents to scuba dive is now virtually unexplored. The results of the study of individual psychological characteristics of the individual children 12 years of age at the beginning of course diving. This paper evaluated the type of temperament , level of neuroticism , lies, anxiety and aggression. Studies have shown that the investigated physiological parameters in young divers are within the age norm . Found that the majority of children by type of temperament are moderate extroverts (85%), 15% - introverted, 98 % of children who choose diving, have a high level of emotional stability , and 2% are emotionally stable. In this case the children was 100 % level of sincerity. Thus, children of this age are able to withstand the extreme effects of factors aquatic environment.
This study investigates investment decision behavior. Specifically, the effects of a person's "experienced regret" and "anticipatory regret" are compared to the effects of an individual's risk tolerance on investment decision behavior. An individual's risk tolerance and "experienced regret" significantly influenced decisions. Anticipation of potential future regret did not predict subsequent investment decision behavior. The experience of regret with a particular type of investment did reduce one's tendency to make a similar investment. The individual's risk tolerance was predictive of participants' investment decision behavior regardless of regret condition. Practical implications of these findings for financial counseling are presented. ©2005, Association for Financial Counseling and Planning Education. All rights of reproduction in any form reserved.
Emerging empirical evidence from the field of behavioral finance has established systematic behavioral influences on investment decisions, including investor gender, personality, and cultural profile. Our aim here is to test whether investment intentions are systematically affected by the context of the investment decision (operationalized as investor goals). We hypothesize that if the context of an investment is made salient at the time of the decision, investors are likely to avoid riskier investment options (operationalized as investments that yield potentially high but variable returns). Our three experimental studies supported our hypothesis.
This article describes CART (Classification and Regression Trees)—an interesting and often powerful nonparametric alternative to parametric methods in modeling. The algorithm and accompanying software is described and contrasted to CHAID (Chi-Square Automatic Interaction Detection). Finally, a case study showing CART's application in response modeling is discussed.