Mandatory corporate social responsibility in India: reporting reality, issues and way forward
ISSN: 2049-372X
Article publication date: 13 September 2021
Issue publication date: 26 May 2022
Abstract
Purpose
Since 2013, the Indian Companies Act Section 135 has mandated corporate social responsibility (CSR) reporting by Indian central public sector enterprises (CPSEs). CSR reporting is regulated by multiple Government of India ministerial agencies, each requiring different formats and often different data. This study aims to understand the impact of these multiple regulatory bodies on CSR reporting by Indian CPSEs; evaluate the expectation gap between regulators and the regulated; and investigate the compliance burden on CPSEs.
Design/methodology/approach
An interview-based approach was adopted to evaluate the perspectives of both regulators and regulated CPSEs on the impact of the new regulations on CSR reporting quality. The authors use the lens of institutional theory to analyse the findings.
Findings
Driven by coercive institutional pressures, CPSEs are overburdened with myriad reporting requirements, which significantly negatively impact CPSEs’ financial and human resources and the quality of CSR activity and reports. It is difficult for CPSEs to assess the actual impact of their CSR activities due to overlapping with activities of the government/other institutions. The perceptions of regulators and the regulated are divergent: the regulators expect CPSEs to select more impactful CSR projects to comply with mandatory reporting requirements.
Originality/value
The findings of this study emphasise the need for meaningful dialogue between regulators and the regulated to reduce the expectation gap and establish a single regulatory authority that will ensure that the letter and spirit of the law are followed in practice and not just according to a tick-box approach.
Keywords
Acknowledgements
The authors are grateful to the 2017 Central Research Grant Scheme, Deakin University, which provided the necessary funding for research assistance for data collection and transcription of interviews.
Citation
Taneja, P., Jain, A., Joshi, M. and Kansal, M. (2022), "Mandatory corporate social responsibility in India: reporting reality, issues and way forward", Meditari Accountancy Research, Vol. 30 No. 3, pp. 472-494. https://doi.org/10.1108/MEDAR-11-2020-1063
Publisher
:Emerald Publishing Limited
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