The term Corporate Social Responsibility, in general, can be referred to as a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare. Companies can fulfill these responsibilities through waste and pollution reduction processes, by contributing educational and social programs by being environmentally friendly and by undertaking activities of similar nature. In the formation of CSR, there was a high-level committee on CSR was formed in 2018 under the chairmanship of Injeti Srinivas.
A company can undertake corporate social responsibility (CSR) by itself or in conjunction with the trust or society established by the company or through an entity, trust or socially established by central or State government or through a registered trust or society with a track record of at least 3 years of similar activities.
The latest rule requires every entity undertaking CSR activities to register itself with the central government with effect from 1st April 2021. This requirement will not apply to project undertaken before the implementation of this rule.
The companies Act 2013 has formulated section 135 Companies (corporate social responsibility) Rules 2014 and Schedule VII which prescribed mandatory provision for companies to fulfill their CSR. Under the Companies Act 2013 certain classes of profitable entities are required to spend at least 2% of their 3 years annual average net profit towards corporate social responsibility in a particular financial year.
CSR applies to Every company, its holding company, Subsidiary company and Foreign Company having in the preceding financial year
- Net Worth 500 crores
- Turnover 1000 crores
- Net profit 5 crores or more
The Activities Include:
- Eradicating Extreme Hunger and Poverty
- Promotion for Education
- Improving Maternal and Child Health
- Ensuring Environmental Sustainability
- Protection of Nations Heritage
- Measures for the benefit of our Armed Forces
- Promoting Sports
- To Contributing Prime Minister’s National Relief Funds or any other fund set up by the central government for socio-economic development and relief and funds for the welfare of the Scheduled Caste and Scheduled Tribes other backward class, minorities and women etc.
Recent Role of CSR
In 2020 The Ministry of Corporate Affairs allows companies to spend CSR funds on covid-19 relief including preventing healthcare and sanitization and on research and development of Covid drugs vaccines and medical devices. It will boost vaccinations for organized labour in the manufacturing sector and will benefit the overburdened healthcare system.
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