Corporate Social Responsibility and Its Impact on Business Performance

Abstract

Corporate social responsibility (CSR) refers to the voluntary and mandatory actions of a business that go beyond its economic and legal obligations and contribute to the welfare of society and the environment. In India, CSR became a legal requirement for eligible companies under Section 135 of the Companies Act, 2013, and since 2014-15 the amount spent on CSR has increased considerably. At the same time, managers and investors ask whether such spending improves business performance or only adds to cost. This paper studies the growth and pattern of CSR in India and the relationship between CSR and business performance on the basis of secondary data. Official data on CSR expenditure were taken from the replies of the Ministry of Corporate Affairs based on the National CSR Portal, and the evidence on performance was collected from published research articles and meta-analyses. Three comparison tables are prepared: year-wise growth of CSR expenditure, a comparison of sector-wise CSR spending in 2019-20 and 2023-24, and a comparison of the findings of important empirical studies on CSR and performance. The analysis shows that CSR spending increased by nearly 40 per cent in four years to about ₹34,909 crore in 2023-24, with a growing share going to education, and that the research evidence supports a positive or at least non-negative link between CSR and performance in most studies, although the relationship depends on context, stakeholder awareness and the quality of implementation. The paper concludes that CSR works best when it is integrated with business strategy and measured for impact, and not treated as a compliance expense.