Corporate Social Responsibility (CSR) is the activities undertaken by corporates, which are related to development, environment, disaster relief & community support. In 2013, India became the first country to legislate the need to undertake CSR activities & mandatorily report CSR initiatives under New Companies Act 2013.
The New Act has incorporated an additional section i.e. Section 135 – clause on Corporate Social Responsibility obligations. The clause covers the essential prerequisites related to the execution, fund allotment and reporting for successful project implementation.
Criteria for being a CSR Corporate:
• Net worth > 500 crore or
• Turnover > 1000 crore or
• Net profit > 5 crore
Those corporates who fall under the above criteria has to spend a minimum of 2% of the average net profits made during the 3 immediately preceding financial years in CSR Activities.
Activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to:—
(i) Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care and sanitation (including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation) and safe drinking water.
(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects.
(iii) promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups.
(iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water (including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga).
(v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries; promotion and development of traditional art and handicrafts
(vi) measures for the benefit of armed forces veterans, war widows and their dependents,
(vii) training to promote rural sports, nationally recognised sports, paralympic sports and olympic sports.
(viii) contribution to the prime minister's national relief fund [or Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the central govt. for socio economic development and relief and welfare of the schedule caste, tribes, other backward classes, minorities and women
(ix) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government.
(x) rural development projects
(xi) slum area development.
(xii) disaster management, including relief, rehabilitation and reconstruction activities.