The second phase of CSR in India (1914-1960) was dominated by the struggle for independence. It was influenced fundamentally by Gandhi’s theory of trusteeship, with an aim to consolidate and amplify social development.
During the struggle, Indian businesses actively engaged in the reform process. They not only perceived country’s economic development as a protest against the colonial rule but also participated in the institutional and social development.The corporate sector’s involvement was stimulated by the vision of a modern and free India.
Under the notion of trusteeship, businesses (especially the well-established family businesses) had set up trusts for schools and colleges as well as established training and
scientific institutes. The corporate heads largely aligned the activities of their trusts with Gandhi’s reform programs like the abolition of untouchability, women’s empowerment and rural development.
C. Third phase:CSR under the paradigm of the “mixed economy”
The third phase of Indian CSR (1960-1980) was affected by the paradigm of the “mixed economy,” characterized by the emergence of PSUs and ample legislation on labor and environmental standards. This phase is also witnessed a shift from corporate self-regulation to stringent legal and public regulation of business activities.
Corporate governance, labor and environmental issues rose on the political agenda and had become the subject of legislation.
Businesses were expected to be respectable corporate citizens, and regular stakeholder dialogues, social accountability and transparency were amongst other expectations. Despite these progressive acknowledgements, this CSR approach failed to materialize.
D. The fourth phase: CSR at the interface between philanthropic and business approaches
In the fourth phase (1980 until today), Indian companies began abandoning traditional philanthropic engagement and moved towards integrating CSR into a coherent and sustainable business strategy, partly by adopting the multi-stakeholder approach.
In the 1990s, the Indian government had initiated reforms to liberalize and deregulate the Indian economy while tackling the shortcomings of the “mixed economy” and trying to integrate India with the global market. Consequently, the controls and license systems were partially abolished, and a pronounced boom was experienced by the Indian economy persisting until today. India has now become an important economic and political player in the process of globalization which has also affected the Indian CSR agenda.