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Insights SECURE SYNOPSIS: 27 February 2021

NOTE: Please remember that following ‘answers’ are NOT ‘model answers’. They are NOT synopsis too if we go by definition of the term. What we are providing is content that both meets demand of the question and at the same time gives you extra points in the form of background information.

General Studies – 1


1. Account for the Poor state of Hunger and Malnutrition in India. Also explain how policy attention is focused on economic growth while we need to address the issue of malnutrition.(250 words)

Reference: Live Mint


Malnutrition refers to deficiencies, excesses or imbalances in a person’s intake of energy and/or nutrients. India’s National Family Health Surveys (NFHS) show that there has been a decline in child malnutrition numbers in the country. However, various studies show that the rate of decline is very slow, and India is still fighting a tough battle.


The Poor state of Hunger and Malnutrition in India:

  • India ranked 94 among 107 nations in the Global Hunger Index 2020 and is in the ‘serious’ hunger category with experts blaming poor implementation processes, lack of effective monitoring, siloed approach in tackling malnutrition and poor performance by large states behind the low ranking
  • Performance on the Indicators:
  • Undernourishment: 14% of India’s population is undernourished (2017-19). It was 16.3% during 2011-13.
  • Child Wasting: 17.3% (2015-19), it was 15.1% in 2010-14.
  • Child Stunting: 34.7%, it has improved significantly, from 54% in 2000 to less than 35% now.
  • Child Mortality: 3.7%, it was 5.2% in 2012.

  • The annual report on “The State of Food Security and Nutrition in the World 2020” by the Food and Agricultural Organization and the 2020 Hunger report, “Better Nutrition, Better Tomorrow” by the Bread for the World Institute have stated staggering facts about Indian food insecurity and malnutrition.
  • As per PoU and PMSFI India is one of the most food-insecure countries, with the highest rates of stunting and wasting among other South Asian countries.
  • The Prevalence of Undernourishment (PoU) measures the percentage of people who are consuming insufficient calories than their required minimum dietary energy requirement.
  • The Prevalence of Moderate or Severe Food Insecurity (PMSFI) identifies the percentage of people who live in households that are severely or moderately food insecure.
  • Food Insecurity Experience Scale survey, which covers almost 90% of the world’s population but not allowed to be conducted in India.
  • It indicates that between 2014-16, about 29.1% of the total population was food insecure, which rose up to 32.9% in 2017-19.
  • About 375 million of the total population was moderately or severely food insecure in 2014, which went to about 450 million in 2019.

Challenges still faced in fighting hunger and malnutrition:

  • Mother’s health:
    • Scientists say the initial 1,000 days of an individual’s lifespan, from the day of conception till he or she turns two, is crucial for physical and cognitive development.
    • But more than half the women of childbearing age are anaemic and 33 per cent are undernourished, according to NFHS 2006. A malnourished mother is more likely to give birth to malnourished children.
  • Social inequality:
    • For example, girl children are more likely to be malnourished than boys, and low-caste children than upper-caste children.
  • Sanitation:
    • Most children in rural areas and urban slums still lack sanitation. This makes them vulnerable to the kinds of chronic intestinal diseases that prevent bodies from making good use of nutrients in food, and they become malnourished.
    • Lack of sanitation and clean drinking water are the reasons high levels of malnutrition persists in India despite improvement in food availability.
  • Lack of diversified food:
    • With the increase in diversity in food intake malnutrition (stunted/underweight) status declines. Only 12% of children are likely to be stunted and underweight in areas where diversity in food intake is high, while around 50% children are stunted if they consume less than three food items.
  • Lack of food security:
    • The dismal health of Indian women and children is primarily due to lack of food security.
    • Nearly one-third of adults in the country have a body mass index (BMI) below normal just because they do not have enough food to eat.
  • Failure of government approaches:
    • India already has two robust national programmes addressing malnutrition the Integrated Child Development Service (ICDS) and the National Health Mission but these do not yet reach enough people.
    • The delivery system is also inadequate and plagued by inefficiency and corruption. Some analysts estimate that 40 per cent of the subsidized food never reaches the intended recipients
  • Disease spread:
    • Most child deaths in India occur from treatable diseases like pneumonia, diarrhoea, malaria and complications at birth.
    • The child may eventually die of a disease, but that disease becomes lethal because the child is malnourished and unable to put up resistance to it.
  • Poverty:
    • The staff of ICDS places part of the blame of malnutrition on parents being inattentive to the needs of their children, but crushing poverty forces most women to leave their young children at home and work in the fields during the agricultural seasons.
    • Regional disparities in the availability of food and varying food habits lead to the differential status of under-nutrition which is substantially higher in rural than in urban areas.
    • This demands a region-specific action plan with significant investments in human resources with critical health investments at the local levels.
  • Lack of nutrition:
    • Significant cause of malnutrition is also the deliberate failure of malnourished people to choose nutritious food.
    • An international study found that the poor in developing countries had enough money to increase their food spending by as much as 30 per cent but that this money was spent on alcohol, tobacco and festivals instead.

India’s effort to achieve food security:

  • Integrated Child Development Services (ICDS), with its network of 1.4 million Anganwadi Centres, reaching almost 100 million beneficiaries who include pregnant and nursing mothers and children up to 6 years;
  • Mid-day meals (MDM) that reach almost 120 million children in schools; and
  • Public Distribution System (PDS) that reaches over 800 million people under the National Food Security Act.
  • The recently announced flagship program of the Ministry of Women and Child Development will be anchored through the National Nutrition Mission (NNM), or Poshan Abhiyaan, with its own specific budget of ₹9,046 crore and a proposed World Bank loan of $200 million, to ensure convergence among the various programmes of the government.
  • Additionally, NITI Aayog has worked on a National Nutrition Strategy (NNS), isolated the 100 most backward districts for stunting and prioritised those for interventions.
  • The National Nutrition Strategy (NNS) has set very ambitious targets for 2022 and the Poshan Abhiyaan has also specified three-year targets to reduce stunting, under-nutrition and low birth weight by 2% each year, and to reduce anaemia by 3% each year.
  • IYCF (Infant and Young child feeding), Food and Nutrition, Immunization, Institutional Delivery, WASH (Water, Sanitation and Hygiene), De-worming, ORS-Zinc, Food Fortification, Dietary Diversification, Adolescent Nutrition, Maternal Health and Nutrition, ECCE (Early Childhood care and Education), Convergence, ICT-RTM (Information and Communication. Technology enabled Real Time Monitoring), Capacity Building.

Measures needed:

  • Governments, private actors, and NGOs should carefully coordinate their responses to overlapping food and health crises and work with community organizations to make sure interventions are culturally acceptable, reach the most vulnerable, and preserve local ecosystems.
  • Food should be priced not only by its weight or volume but also by its nutrient density, its freedom from contamination, and its contribution to ecosystem services and social justice.
  • Governments should expand access to maternal and child health care, as well as education on healthy diets and child feeding practices.
  • Supporting smallholder farmers in becoming sustainable and diversified producers; governments and NGOs must seek to improve those farmers’ access to agricultural inputs and extension services, coupling local and indigenous agricultural knowledge with new technologies.
  • Existing human rights-based multilateral mechanisms and international standards—such as the Committee on World Food Security—must be strengthened to support inclusive policy making and sustainable food systems.


Prioritizing early childhood nutrition is key to ensuring India’s development rests on strong and steady shoulders. India’s ability to harness long-term demographic dividends rests on it prioritizing nutrition in its health agenda, and reforming the institutional framework through which interventions are delivered.


2. Examine the role of Finance commission in strengthening the principles of cooperative federalism in India. (250 words)



A finance commission is set up every five years by the President of India under Article 280 of the Constitution. Its main function is to recommend how the Union government should share taxes levied by it with the states. These recommendations cover a period of five years.

The commission also lays down rules by which the centre should provide grants-in-aid to states out of the Consolidated Fund of India. It is also required to suggest measures to augment the resources of states and ways to supplement the resources of panchayats and municipalities.


Finance commission role in relations between Centre and States:

  • The founding fathers of the Indian Constitution were aware of the issues related to uneven development of the native states and historically poorer hinterlands since the colonial rule. The coastal states were comparatively richer than the scarcity-hit provinces of Central India.
  • This awareness of the Constitution framers made them understand the difficulty in rigidly dividing all financial resources and revenue among different regionsand thus, an independent Finance Commission (FC) was created. Since 1951, Finance Commissions (FC) have been constituted keeping in mind the unique macro context and fiscal conditions existing in the constituent period. 
  • The Indian federal system allows for the division of power and responsibilities between the centre and states.  Correspondingly, the taxation powers are also broadly divided between the centre and states.
  • The centre collects majority of the tax revenue as it enjoys scale economies in the collection of certain taxes.  States have the responsibility of delivering public goods in their areas due to their proximity to local issues and needs.
  • Sometimes, this leads to states incurring expenditures higher than the revenue generated by them.  Further, due to vast regional disparitiessome states are unable to raise adequate resources as compared to others.  To address these imbalances, the Finance Commission recommends the extent of central funds to be shared with states.
  • Any other matter referred to the Commission by the President of India in the interest of sound finance. Several issues like debt relief, financing of calamity relief of states, additional excise duties,have been referred to the Commission invoking this clause.
  • Federal Finance is in essence dynamic and not static and therefore, constant readjustment of federal states – local financial relations is called for this purpose in every federation there are “Balancing Factors” like shared taxes, grant in aid central loans to federating units, the devolution of which has important bearing on the economic development and balanced regional growth of a country. The FC seeks to balance the balancing factors.
  • The provision of the Finance Commission is intended to assure the states that the scheme of distribution shall not be made by the union arbitrarilyor under pressure or bias but shall be based on the recommendation of the independent commission.
  • According to the noted economist D.T Lakdawala “The Finance Commission is expected to play a role of wise man, a judge between the conflicting claims of the states, on the one hand, and the centre on the other”

Important recommendations of 15th FC:

  • The Commission has reduced the vertical devolution — the share of tax revenues that the Centre shares with the states — from 42% to 41%.
  • The Commission has said that it intends to set up an expert group to initiate a non-lapsable fund for defence expenditure.

State- wise distribution:

  • Shares of the southern states, except Tamil Nadu, have fallen — with Karnataka losing the most.
  • Shares of states like Maharashtra, Himachal Pradesh and Punjab, along with Tamil Nadu, all of which have fertility rates below the replacement level, have increased slightly.
  • On the other hand, Andhra Pradesh, Kerala, Karnataka, and West Bengal’s shares have fallen, even though their fertility rates are also low.
  • Incidentally, Karnataka, the biggest loser in this exercise, also had the highest tax-GSDP ratio in 2017-18, as per an RBI report on state finances.


  • The population parameter used by the Commission has been criticised by the governments of the southern states.
  • The previous FC used both the 1971 and the 2011 populations to calculate the states’ shares, giving greater weight to the 1971 population (17.5%) as compared to the 2011 population (10%).
  • The use of 2011 population figures has resulted in states with larger populations like UP and Bihar getting larger shares, while smaller states with lower fertility rates have lost out.
  • The combined population of the Bihar, Uttar Pradesh, Madhya Pradesh, Rajasthan and Jharkhand is 47.8 crore.
  • This is over 39.48% of India’s total population, and is spread over 32.4% of the country’s area, as per the 2011 Census.
  • On the other hand, the southern states of Tamil Nadu, Kerala, Karnataka and undivided Andhra Pradesh are home to only 20.75% of the population living in 19.34% of the area, with a 13.89% share of the taxes.
  • This means that the terms decided by the Commission are loaded against the more progressive (and prosperous) southern states.


                Despite the various issues surrounding the 15th finance commission, the successive FC’s has tried to be lynchpin between center-state relations and uphold the principle of fiscal federalism. Finance commission has been recommending financial resources to the states to achieve balanced development and to normalise the Centre State financial relations and remove the vertical and horizontal imbalances in the country.


3. “India’s vision of Indo-Pacific envisages free, open, inclusive, rules-based region.” Elaborate. (250 words)

Reference: Economic Times


Indo-Pacific region is a multi-polar region, contributing more than half of the world’s GDP and population. Countries falling in the direct hinterland of the vast Indian and Pacific oceanic expanse are termed ‘Indo-Pacific countries’.  The attributes of the Indo-Pacific are also highly appealing. The region comprises at least 38 countries that share 44 percent of world surface area and 65 per cent of world population, and account for 62 per cent of world–GDP and 46 per cent of the world’s merchandise trade


India’s concept of inclusive Indo-Pacific region:

  • Indian PM in Shangri-La dialogue had clearly indicated the geographical reach of India’s idea of the Indo-Pacific starting from Africa to the Americas, which covers both the Indian and Pacific Oceans, in tandem with that of Japan.
  • He had also emphasized on a few major aspects which reflect India’s policy perspective on Indo-Pacific, which included “inclusiveness”, “openness”, “ASEAN centrality” and that the concept was not directed against any country.
  • India has gone to great length to highlight China as an inclusive construct for the whole region.
  • The focus of the Indo Pacific initiative is on connectivity, enhancing maritime security, counterterrorism, non-proliferation and cyber issues.
  • A shared commitment to maintain and strengthen a rules-based order in the Indo-Pacific in which all nations are sovereign, strong and prosperous.
  • And shared support for a free, open and inclusive region that fosters universal respect for international law, freedom of navigation and overflight and sustainable development.

India’s concept of Indo-Pacific is across oceans:

  • Indo-Pacific Maritime Cooperation: The major focus of the Indo-Pacific is based on oceans, which is the common thread that connects all. Countries including India, Indonesia, Singapore, and Sri Lanka, primarily maritime nations occupy the most important strategic positions in the Indian Ocean.
  • The government has introduced the concept of SAGAR (Security and Growth for All in the Region) and believes in an Indo-Pacific that is free, open and inclusive, and one that is founded upon a cooperative and collaborative rules-based order.
  • In continuation of the process of engaging the global strategic community in an annual review of India’s opportunities and challenges in the Indo-Pacific region, the second edition of Indo-Pacific Regional Dialogue (IPRD) – 2019 was held in New Delhi in March.
  • The first Malabar naval exercise was a joint Indo-US Naval exercise which started in 1992. However, there was a gap from 1998-2002 when the exercise was suspended due to India’s nuclear weapons tests. Since 2002, every year there has been the naval drill and Japan became a permanent participant in 2015.

Way Forward for India:

  • Economically and strategically, the global centre of gravity is shifting to the Indo-Pacific. If the region’s stakeholders don’t act now to fortify an open, rules-based order, the security situation will continue to deteriorate—with consequences that are likely to reverberate worldwide.
  • With joint military exercises, India will develop interoperability and standard operating procedures, which will help in any joint military operation or even possibly a military alliance in the future.
  • The Quad Security cooperation among Japan, India, the US and Australia is increasingly plausible. The time has come to proactively further this cooperation to ensure prosperity and stability in the whole of Indo-Pacific.
  • Groups like ASEAN and APEC will have to collectively approach China. Standing up to it and physically stopping illegal Chinese construction will gain international attention and the sympathy and backing of major powers.


India is already assuming her responsibilities in securing the Indo-Pacific region. A strong India-US partnership can anchor peace, prosperity and stability from Asia to Africa and from the Indian Ocean to the Pacific. It can also help ensure security of the sea-links of commerce and freedom of navigation on seas.


4. Do you think India’s concept of federalism is compromising India’s human capital development”? Critically analyse. (250 words)

Reference: The Hindu


Investing in human capital through interventions in nutrition, health, and education is critical for sustainable growth and reaping demographic dividend. But India’s human capital indicators remain low. In the World Bank’s Human Capital Index, the country ranked 116th. The National Family Health Survey-5 for 2019-20 shows that malnutrition indicators stagnated or declined in most States. The National Achievement Survey 2017 and the Annual Status of Education Report 2018 show poor learning outcomes.


Federalism in India impacting Human Capital Development:

  • Incomplete decentralisation: Globally, there has been a gradual shift in the distribution of expenditures and revenue towards sub-national governments.
  • Overlapping subjects of 7th Schedule: While public health is in the State List, the broader subject of economic and social planning is in the Concurrent List.
    • In 1976, education was shifted from the State List to the Concurrent List through the 42nd Amendment.
    • The placement of a subject in the Concurrent List, in effect, indicates the presence of overarching considerations that warrant the Centre’s involvement.
  • Fiscal considerations: Fiscally, while the Constitution assigns the bulk of expenditure responsibilities to States, the Centre has major revenue sources.
    • While fiscal transfers that are part of tax devolution are unconditional, transfers under grants-in-aid or Centrally Sponsored Schemes (CSSs) can be conditional.
  • Top down approach: Between 2000-2018, the Centre spent over Rs 14 lakh crores on social services. A significant portion of this expenditure is met through Centrally Sponsored Schemes (or CSS)– a specific purpose transfer, from the Centre to states.
    • These constraints and undermines the state autonomy and leads to one size fits all approach.
  • Design of CSS: There are issues in the design of CSSs as well, with the conditions being overly prescriptive and, typically, input-based. Against this, international experience reveals that schemes with output-based conditions are more effective.
    • Moreover, CSSs typically have a cost-sharing model, thereby pre-empting the States’ fiscal space.
  • Powers of third tier: True decentralisation was left to the discretion of the states to devolve matters such as education, health and public welfare services.
    • However, except Kerala States have not transferred the power to Panchayats and Municipalities.
    • Further, third-tier governments are not fiscally empowered either. The collection of property tax, a major source of revenue for third-tier governments, is very low in India (under 0.2% of GDP, compared to 3% of GDP in some other nations).

Suggested measures:

  • Centre should play an enabling role, for instance, encouraging knowledge-sharing between States. For States to play a bigger role in human capital interventions, they need adequate fiscal resources.
  • To this end, States should rationalise their priorities to focus on human capital development.
  • The Centre should refrain from offsetting tax devolution by altering cost-sharing ratios of CSSs and increasing cesses. The unconditional nature of these vertical transfers should be effectuated in spirit.
  • Concomitantly, the heavy reliance on CSSs should be reduced, and tax devolution and grants-in-aid should be the primary sources of vertical fiscal transfers.
  • Panchayats and municipalities need to be vested with the functions listed in the Eleventh and Twelfth Schedules.


Leveraging the true potential of our multi-level federal system represents the best way forward towards developing human capital. India is at a stage where it will have the highest working population in the world, which is a huge opportunity is accelerating the economic growth. Faultlines of federalism should not become an obstacle in development of the human capital.


5. Australia’s News Media and Digital Platforms Mandatory Bargaining Code have opened up debates on the regulation of digital media and its effects on free speech; in this context discuss need for regulation of digital media in our country. (250 words)

Reference: The Hindu 


Australia has passed a new law that will require digital platforms like Facebook and Google to pay local media outlets and publishers to link their content in news feeds or search results. Facebook announced Monday it will restore news pages in Australia, reversing an earlier decision to block access to news content in Australia in retaliation against the then proposed bill. This brings a focus on Digital media regulation in India as well.


Need for Regulation:

  • The issue of content regulation has always been important in India because of the diverse nature of Indian society in terms of religion, economic status, caste and language. Therefore, the effect that digital media has on society forms the basis of its regulation by the state.
  • The speed and reach of digital media especially social media have meant that subversive rumours and fake news get aired with impunity.
    • This has resulted in serious law and order problems.
  • In India, this phenomenon has assumed dangerous proportions. Fake news and hate speech have led to lynchings and communal flare-ups in many parts of the country. This menace needs to be curbed.
    • Eg: Delhi Riots, DG Halli riots in Bangalore.
  • The Supreme Court had expressed the need to regulate social media to curb fake news, defamation and trolling. It had also asked the Union government to come up with guidelines to prevent misuse of social media while protecting users’ privacy.
  • Threat of foreign influence and interference in India’s domestic affairs is more real than ever, particularly from India’s hostile neighbours like China and Pakistan.
  • The guidelines could help the government in tightening the noose on Chinese and other foreign companies who are making investments in digital media in the country.

Digital media regulation in India:

  • On November 11, the government issued an order bringing online news portals and Over the Top (OTT) content under the regulatory purview of the Information and Broadcasting (I&B) Ministry.
  • For the first time, the government, under the ambit of the Information Technology (Intermediary Guidelines and Digital Media Ethics Code) Rules 2021, has brought in detailed guidelines for digital content on both digital media and Over the Top (OTT) platforms, while giving overriding powers to the government to step in.
  • Publishers of news on digital media would be required to observe the ‘Norms of Journalistic Conduct’ of the Press Council of India and the ‘Programme Code’ under the Cable Television Networks Regulation Act.
  • There is a three-tier mechanism that has been envisaged where in government has overriding and also emergency powers.


Many governments are also revising their legal frameworks to ensure that cultural values and creative economies remain protected and can thrive in today’s online environment. Having talked about controlling online content it is expected that an excess of restriction/guideline could influence the innovative freedom of the content essayists/makers. A balance must be struck between regulation and freedom of content ensuring responsible digital media.


General Studies – 3


6. How will the melting of Himalayan glaciers have a far- reaching effect on the water resources of India? Examine. (250 words)

Reference: Times of India


Hind Kush, the world’s third pole is 3,500 km long spread over 8 countries in South Asia and home to 10 major river basins is under severe threat of climate change. According to the Hindu Kush Himalaya Assessment Report, more than a third of the Himalayan glaciers could melt away by 2100, even if carbon emissions are dramatically cut and global warming limited to 1.5 degrees Celsius. The melting of these glaciers will put a threat on 1.9 billion people.


Impact of melting of Himalayan glaciers on water resources:

  • The Hindukush Himalayan region’s snow is the source of 10 major river systems including the Ganga, Indus, Brahmaputra and Mekong in India, Pakistan, Afghanistan, Nepal, Bangladesh, Bhutan, China and Myanmar.
    • Large-scale warming could drastically alter the river flows in these countries.
    • The receding glaciers could cause a deluge in the rivers during the monsoon while the flows are likely to plummet during the dry seasons, with serious implications for irrigation, hydropower and ecosystem services.
  • Changes in river flows could not only cause more erosion and landslides in the mountains but also destroy dams and impact hydropower production.
  • A global temperature increase of 1.5ºC could mean at least a 1.8ºC temperature rise in the Hindu Kush Himalayas, the ICIMOD study warns.
    • Rise in global temperatures could destabilise the hydrology of large parts of South Asia, China and Myanmar. This will have a major bearing on the ice-fields, which are the largest repository of permafrost outside the polar regions.
  • Groundwater depletion:
  • increased melting may increase the volume of water in rivers, which might lead to more extensive flooding. As glaciers retreat, the amount of meltwater flowing into rivers could decline considerably. Since surface and groundwater systems are interconnected, such a situation may lead to a substantial drop in the rates of groundwater recharge in some regions.
  • Impact of climatic conditions:
    • The number of intense precipitation days and intensity of extreme precipitation have increased overall in the last five decades. If these trends persist, the frequency and magnitude of water-induced hazards in the (Hindu Kush Himalaya) region will increase.
    • Given the speed at which these glaciers are melting and retreating due to changes in climatic conditions, there will be frequent and unpredictable devastating glacial lake outbursts and floods, causing severe damages to lives, livestock and livelihood.
  • Impact on monsoons:
    • Developments in the Himalayas are known to have a spin-off on the monsoon in the Subcontinent.
    • Water sources of countries in the Himalayan region vitally depend on the monsoon rains and streams emanating from the Himalayas. It is pretty clear now that climate change and global warming have heavily affected rainfall patterns, the concentration of snow and ice and eventually the flow of streams in the Himalayas.
  • Increased incidents of natural disasters:
    • It is believed that the increased melting of Himalayan glaciers will bring on flooding disasters for the next few decades, and what would happen after this is the Ganga and the Indus flowing with radically reduced pace resulting in acute water stress, mass migration, and unseen conflicts

Measures needed:

  • Cross-border dialogues and cooperation are necessary to put in place an effective cooperative mechanism to find and promote amicable solutions to the river water sharing problems.
  • Integrated water resources management could prove to be a great tool to augment water resources, improve quality of water and bring countries in the Himalayan region together to manage transboundary basins collectively.
  • International experiences: Experiences from the Arctic Council – an intergovernmental panel in the Arctic region and the Alpine convention an international treaty for sustainable development of the Alps need to be shared to provide learnings for the HKH cooperation efforts.


A regional approach is necessary for the protection of the HinduKush Himalaya’s interconnected systems. Countries that share the hydrological boundaries must come together to understand the nature of the resource, share data with one another, and contribute to comprehensive planning.


General Studies – 4


7. What is CSR? write a note on National Guidelines on Responsible Business Conduct (NGRBC).(250 words)



Corporate Social Responsibility (CSR) is referred as a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare and to promote positive social and environmental change.


Features of CSR in India:

Under the Companies Act, businesses can invest their profits in areas such as promoting rural development in terms of healthcare, sanitation, education including skill development, environmental sustainability, etc.

Companies are required to spend, in every financial year, at least 2% of their average net profits generated during the 3 immediately preceding financial years.

In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013.

  • India is the first country in the world to mandate CSR spending along with a framework to identify potential CSR activities.
  • The CSR provisions within the Act is applicable to companies with an annual turnover of 1,000 crores and more, or a net worth of Rs. 500 crores and more, or a net profit of Rs. 5 crores and more.
  • The Act requires companies to set up a CSR committee which shall recommend a Corporate Social Responsibility Policy to the Board of Directors and also monitor the same from time to time.
  • The Act encourages companies to spend 2% of their average net profit in the previous three years on CSR activities.
  • The indicative activities, which can be undertaken by a company under CSR, have been specified under Schedule VII of the Act.

National Guidelines on Responsible Business Conduct (NGRBC):

  • Ministry of Corporate Affairs has revised the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011 (NVGs) and formulated the National Guidelines on Responsible Business Conduct (NGRBC).
  • The NGRBC has been designed to assist businesses to perform above and beyond the requirements of regulatory compliance.
  • NGRBC guidelines urge businesses to actualise the principles in letter and spirit.
  • These principles are interdependent, interrelated and non-divisible and all business are urged to address them holistically.
  • The NGRBC principles are:
    1. Businesses should conduct and govern themselves with integrity in a manner that is Ethical, Transparent and Accountable.
    2. Businesses should provide goods and services in a manner that is sustainable and safe
    3. Businesses should respect and promote the well-being of all employees, including those in their value chains.
    4. Businesses should respect the interests of and be responsive to all their stakeholders.
    5. Businesses should respect and promote human rights.
    6. Businesses should respect and make efforts to protect and restore the environment.
    7. Businesses, when engaging in influencing public and regulatory policy, should do so in a manner that is responsible and transparent.
    8. Businesses should promote inclusive growth and equitable development.
    9. Businesses should engage with and provide value to their consumers in a responsible manner.
  • The NGRBC is dovetailed with the United Nations Guiding Principles on Business & Human Rights (UNGPs).
  • The NGRBC intends to not just make companies more responsible and accountable but also to create a whole ecosystem to ‘Protect’, ‘Respect’ & ‘Remedy’ as envisaged in the UNGPs.


The constitutional vision of our country promotes inclusive growth and sustainable development.   The   challenge   is   to   attain   these   goals   by   cautiously   balancing   developmental needs with welfare goals. Responsible Business Conduct is a globally recognized concept founded on the idea that businesses can perform better when engaged in re-vitalizing the society from which they extract resources for production.

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