Corporate Social Responsibility (CSR)

Corporate Social Responsibility (CSR)

• The term “Corporate Social Responsibility” in general can be referred to as corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare.
• 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 spendingalong with a framework to identify potential CSR activities.
• The CSR provisions within the Act is applicableto companies with an annual turnover of 1,000 crore and more, or a net worth of Rs. 500 crore and more, or a net profit of Rs. 5 crore and more.
• The Act requires companies to setup 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 yearson CSR activities.
• The indicative activities, which can be undertaken by a company under CSR, have been specified underSchedule VII of the Act.
• The activities include
  • • Eradicating extreme hunger and poverty,
    • Promotion of education, gender equality and empowering women,
    • Combating Human Immunodeficiency Virus, Acquired Immune Deficiency Syndrome and other diseases,
    • Ensuring environmental sustainability;
    • Contribution to the Prime Minister’s National Relief Fundor any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women etc.

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