UNDERSTANDING THE LEGAL LANDSCAPE OF CORPORATE SOCIAL RESPONSIBILITY IN INDIA AND THE RAMIFICATIONS THEREOF WITH A SPECIAL FOCUS ON ‘SLUM DEVELOPMENT’
AUTHOR – RASHI TANNA & KAVYA SHARMA
STUDENTS AT NMIMS, KIRIT P. MEHTA SCHOOL OF LAW
BEST CITATION – RASHI TANNA & KAVYA SHARMA, UNDERSTANDING THE LEGAL LANDSCAPE OF CORPORATE SOCIAL RESPONSIBILITY IN INDIA AND THE RAMIFICATIONS THEREOF WITH A SPECIAL FOCUS ON ‘SLUM DEVELOPMENT’, ILE INTELLECTUAL PROPERTY AND CORPORATE LAW REVIEW, 5 (1) OF 2026, PG. 01-09, APIS – 3920 – 0008 | ISSN – 2583–6153. DOI – https://doi.org/10.65393/OWAC7564
Abstract
Corporate Social Responsibility (CSR), which in most countries is merely a social obligation, has gained legal recognition and compulsion in India for certain companies as prescribed in the Companies Act, 2013. Section 135 mandates eligible companies to allocate at least 2% of their average net profits towards CSR activities along with prescribing measures to be taken and provisions to be made to facilitate this allocation and transfer of funds. However, significant challenges persist in the CSR framework.
Through this research, we try to understand and analyze the existing statutes, laws, guidelines and other legal frameworks that govern allocation and distribution of CSR funds. We try to explore several loopholes, fallacies and shortcomings in the present laws. To further understand the extent of the implications of these loopholes on sectors of spending in detail, the slum development sector is taken as a case study. Data such as change in the amount of yearly spendings on slum development, change in these spendings in accordance to geographical locations etc. is taken into consideration in order to try and understand behavioral patterns observed in companies while allocating funds to CSR sectors. This paper examines potential solutions to mitigate the existing gaps within India’s legal framework. These solutions involve policies and regulations that complement the current framework, enabling the resolution of these gaps without necessitating a complete overhaul of the system.
In conclusion, this research aims to provide a holistic understanding of the CSR framework in India, highlighting the challenges and inconsistencies that hinder its effective implementation. By examining the nuances of statutory requirements and behavioral patterns in CSR spending, particularly in the context of slum development, this paper seeks to propose actionable solutions that align with the existing legal structure. These recommendations are designed to enhance accountability, transparency, and impact in CSR initiatives, contributing to a more equitable and sustainable approach to corporate social responsibility in India.