UPSC Mains 2017 GS Paper 4 Q4b: model answer
Corporate social responsibility makes companies more profitable and sustainable. Analyse.
What the question wants
Analyse the claim that corporate social responsibility makes companies more profitable and sustainable.
How to structure it
For, against, verdict.
- CSR in India
- How it helps profit and sustainability
- Limits
- Verdict
How to think it through
Companies Act 2013 s.135: 2% of average net profit for companies with net worth ≥₹500 crore / turnover ≥₹1,000 crore / net profit ≥₹5 crore. India first to mandate. CSR spend ~₹30,000 crore+/yr (FY23 ~₹29,987 crore?). Benefits: reputation, employee retention, social licence to operate, risk reduction, innovation (ITC e-Choupal, Tata), ESG investors (SEBI BRSR 2021 top 1000 listed). Limits: tick-box, greenwashing, concentration in urban states, not substitute for core ethics. Verdict.
Model answer
In 2014, India became the first country to make CSR spending mandatory. Under Section 135 of the Companies Act, 2013, large companies must spend 2% of their average net profit on social causes. The question is whether this is a cost or an investment.
How CSR can raise profit and sustainability
- Reputation: customers prefer responsible firms.
- Social licence to operate: mining and infrastructure firms that invest in local health and schools face less resistance.
- Investors: ESG-focused funds look for responsible firms; SEBI's BRSR reporting (from 2021) for the top 1,000 listed companies makes this visible.
- Innovation: ITC's e-Choupal helped farmers and also built the company's sourcing network.
The limits
- Tick-box CSR: spending to meet the 2% rule without real impact.
- Greenwashing: CSR on one side, pollution on the other.
- Concentration: CSR money goes mostly to richer, industrial states, not where need is greatest.
Verdict
- CSR makes companies more profitable and sustainable when it is linked to their core business and real community needs, not when it is charity at arm's length.
Responsibility pays when it is part of the business, not a page in the annual report.
Draw: A two-column table: 'how CSR pays' and 'when it doesn't'.
Keywords, cases and data to drop in
CSR, Section 135 Companies Act 2013, 2% of profit, mandatory since 2014, reputation, social licence to operate, ESG, SEBI BRSR 2021, ITC e-Choupal, greenwashing, tick-box CSR, regional concentration.
Where most answers lose marks
- Agreeing fully without the limits.
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Fresh examples from current affairs
Supreme Court: no prior approval under Section 17A needed to probe a bribe demand
In a judgment of 16 October 2026, a Supreme Court Bench of Justices S.V.N. Bhatti and N.V. Anjaria held that investigating a bribe demand by a public servant does not need prior approval under Section 17A of the Prevention of Corruption Act. Asking for a bribe, the court said, is not part of discharging official duties.
UPSC angle: Prelims: Sections 7, 7A, 17A and 19 of the PC Act. · Mains GS-II/GS-IV: honest officers versus accountability.
19 Oct 2026Learn the concept
Question text as printed in the official UPSC Civil Services (Main) question paper. The model answer is original Battle IAS work; use it to learn structure, not to memorise.
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