The impact of corporate social responsibility on firm s financial performance an empirical study on central public sector enterprises in india

Abstract

The concept of Corporate Social Responsibility (CSR) is not a new one. CSR newlinestarted to evolve on and after 1950. But the idea of doing well for the workers and newlinethe society at large by business organisations started during the 1800s. Before newlinethe 1990s, most people looked upon corporate contribution as wastage of newlineshareholders money as the money used to be donated by the corporations newlinewithout the approval of shareholders. newlineDifferent levels of social responsibility expenditure provide a different newlineportrait of financial performance. At the same time, it has been observed that CSR newlinecould be responsible for improving financial health. and if the firms are not willing newlineto do CSR activities properly, then these firms would lose their existence in the newlinefuture. CSR might be an action strategy of firms to improve the financial newlineperformance of firms. It has been seen that 509 companies out of 1,000 newlinecompanies were making CSR expenditures in the financial year 2007-08. Seeing newlinethe importance of CSR, in June 2008, the Ministry of Corporate Affairs newlineencouraged companies to disclose the social works on the balance sheet that the newlinecompanies had done and in February 2009, the Ministry of Petroleum had made it newlinecompulsory for the public sector oil companies to spend 2% of the net profits on newlineCSR activities. It has been seen that when a company engages itself in CSR newlineactivities, then the company s sales and profit become high, but in the absence of newlineCSR activities, the sales and profit of a company get less. It has been seen that newlineafter coming into force of the Companies Act, 2013, the amount of spending newlinemoney on CSR activities increased from Rs. 10,066 crore in 2014-15 to Rs. newline13,624 crore in 2017-18 newline