Mandatory vs Voluntary Corporate Social Responsibility: A Comparative Analysis of Corporate Social Responsibility Practices in India and Sri Lanka

Corporate Social Responsibility (CSR) has emerged as a vital aspect of modern corporate governance, emphasizing the accountability of businesses not only to shareholders but also to society at large. While CSR methods are extensively embraced worldwide, the regulatory approach to CSR varies greatly among countries. India has initiated a mandatory CSR framework under section 135 of the Companies Act of India (2013). This statutory obligation has created a structured approach compelling companies to actively contribute to social welfare, environmental sustainability and community development. In contrast, Sri Lanka continues to rely predominantly on voluntary CSR practices guided by soft law instruments such as the Corporate Governance Codes issued by the Colombo Stock Exchange and individual company policies. This study conducts a comparative analysis of the CSR frameworks in India and Sri Lanka focusing on the legal, regulatory and practical dimensions of mandatory versus voluntary CSR. This research examines how statutory obligations in India have influenced corporate behaviour and enhanced transparency and created measurable social impact while exploring the strengths and limitations of Sri Lanka’s voluntary CSR practices. The research identifies the gaps in Sri Lanka’s current CSR system, particularly in terms of enforcement, reporting standards and alignment with national development priorities. By analysing case studies, corporate reports and existing literature, this study aims to provide actionable insights and recommendations for Sri Lanka. It considers whether aspects of India’s mandatory CSR model can be adapted to strengthen Sri Lanka’s CSR framework, including potential statutory reforms, regulatory oversight and enhanced corporate accountability. This research contributes to the broader discourse on CSR by highlighting how legal mechanisms can shape corporate social engagement and societal outcomes. Ultimately, the study offers a policy-oriented perspective for enhancing CSR effectiveness in Sri Lanka.