Mandatory Corporate Social Responsibility as a Vehicle for Reducing Inequality: An Indian Solution for Piketty and the Millennials

98 Pages Posted: 10 Sep 2014 Last revised: 1 Sep 2016

See all articles by Sandeep Gopalan

Sandeep Gopalan

Deakin University, Geelong, Australia - Deakin Law School

Akshaya Kamalnath

AUT Law School, AUT Univrsity

Date Written: September 7, 2014

Abstract

We argue that mandatory Corporate Social Responsibility (CSR) could contribute to ameliorating inequality. Instead of the tax increases and other confiscatory proposals advocated by scholars such as Piketty, we put forth a model for legislation in the United States requiring companies (excluding SMEs) to spend 1% of their annual profits on designated CSR activities. Our proposal is based upon India's innovative CSR law but has important differences.

The paper provides a detailed analysis of the CSR provisions in the Indian Companies Act and related rules. It also offers an empirical examination of CSR activities of companies in the NSE50 since the adoption of the Companies Act, 2013, showing that companies have broadly embraced the legal mandate although implementation remains patchy due to inadequacies in the legislation.

Keywords: corporate governance, CSR, inequality, India, Companies Act, Piketty, Tata, Infosys, NSE50

JEL Classification: G38, H21, K20, K22, M14

Suggested Citation

Gopalan, Sandeep and Kamalnath, Akshaya, Mandatory Corporate Social Responsibility as a Vehicle for Reducing Inequality: An Indian Solution for Piketty and the Millennials (September 7, 2014). Northwestern Journal of Law and Social Policy, Vol. 10, No. 1, 2015; Deakin Law School Research Paper No. 16-23. Available at SSRN: https://ssrn.com/abstract=2492923 or http://dx.doi.org/10.2139/ssrn.2492923

Sandeep Gopalan (Contact Author)

Deakin University, Geelong, Australia - Deakin Law School ( email )

221 Burwood Highway
Burwood
Burwood, Victoria 3125, Victoria 3125
Australia

Akshaya Kamalnath

AUT Law School, AUT Univrsity ( email )

120 Mayoral Drive
Auckland, Victoria 1010
New Zealand

Register to save articles to
your library

Register

Paper statistics

Downloads
238
Abstract Views
1,127
rank
127,615
PlumX Metrics