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Impact of CSR on Government functioning

Corporate Social Responsibility (CSR) in India is regulated by the Companies Act, 2013, which mandates companies to spend 2% of their average net profits of the preceding three years on CSR activities. The impact of CSR on the functioning of the Government of India can be analyzed from various perspectives:

1. Collaborative efforts: The CSR provisions have facilitated a collaborative approach between the government and corporates to address social and environmental challenges. The government has identified certain areas where companies can invest their CSR funds, such as education, health, environment, and poverty alleviation. The funds provided by companies are utilized to supplement government efforts, leading to a more effective and efficient implementation of various programs.

2. Increased resources: With the implementation of the CSR provisions, the government has gained access to additional resources, enabling them to invest in areas that may have been ignored earlier due to financial constraints. This has led to the creation of a robust mechanism for ensuring accountability and transparency in the utilization of CSR funds.

3. Inclusive growth: CSR has helped in promoting inclusive growth by providing support to underserved communities, which have been left behind in the mainstream development process. The government has also initiated programs aimed at empowering marginalized communities and CSR has acted as a catalyst to achieve the desired outcomes.

4. Addressing environmental challenges: The CSR provisions have emphasized the need for companies to take responsibility for their environmental impact. This has led to increased investment in environmental sustainability initiatives, including afforestation, renewable energy, and waste management.