Abstract:
Thought or any discussion of Corporate Social Responsibility (CSR) always remains an enigma for
businessmen. Some consider it a forced expenditure which brings no value to shareholders even if there is an
age old practice of putting money by Indian businesses for social development. The Companies Act, 2013 has
made this mandatory for every company having net worth of Rs. 500 crore or more, or turnover of Rs. 1,000
crore or more or a net profit of Rs. 5 crore or more during any financial year to constitute a CSR Committee
and to spend, in every financial year, at least two per cent, of the average net profits of the company made
during the three immediately preceding financial years, towards CSR activities. Companies with their eye on
getting some publicity, try to put money in activities which in the end neither benefit society nor company.
However, the case of CSR activities undertaken by pharmaceutical companies is more interesting on account
of nature of their business. Majority of pharmaceutical companies are already spending money on CSR
activities mentioned in the legislation and are duly reporting the same, in their annual reports. It is difficult
to assess whether these activities are bringing any noticeable value for companies given their lack of direction,
relatedness & prioritization in these activities. It becomes essential for pharmaceutical companies to consider
it as an opportunity to create strategic advantage for society as well as for business in place of considering it
as a financial burden on shareholders. However, pharmaceutical companies need to follow a systematic
framework to decide which CSR activities should be undertaken, out of the prescribed ones, to create that
competitive & strategic advantage. The present study provides insights on CSR activities of pharmaceutical
and allied sector companies. The study covers aspects such as activities undertaken by these leading
pharmaceutical companies, their CSR spending, thrust areas of CSR expenditure, geography covered for CSR
activities, and the extent of compliance with the provisions of the Companies Act, 2013. A suggestive
framework is being provided for pharmaceutical companies for CSR spending so that effort remains directed,
related to their core competencies and focus on priority areas out of all CSR activities. This framework will
not only help not in creating competitive and strategic advantage for company but also for the society as it
will consider aspects such as direction of CSR spend, relatedness of existing CSR activities to their business
and prioritization of CSR activities.
