What is Corporate Social Responsibility ?

Corporate Social Responsibility (CSR) refers to the voluntary efforts taken by companies to address social and environmental issues that are beyond their legal obligations. It involves taking actions that benefit both the company and society and align with the company's values and goals. In India, the Companies Act, 2013 mandates companies with a certain level of net worth, turnover or profit to spend a certain percentage of their average net profit for the immediately preceding three financial years on CSR activities.

Legal provisions with respect to CSR in India

As per Section 135 of the Companies Act, 2013, companies with net worth of INR 500 crore or more, turnover of INR 1,000 crore or more, or a net profit of INR 5 crore or more during the immediately preceding financial year are required to spend at least 2% of their average net profit for the last three financial years on CSR activities.

The computation of net profit for CSR is as per Section 198 of the Companies Act, 2013. Section 198 provides that while computing the net profits of a company a credit should be given for the subsidies and bounties received from any Government, or public authority authorised or constituted on this behalf.

The CSR activities must align with the Schedule VII of the Act and can include areas such as poverty alleviation, education, health, environment protection, etc. CSR is seen as a way for companies to give back to society and create a positive impact, while also contributing to their long-term success by enhancing their reputation and relationship with stakeholders.

CSR initiatives taken by Indian companies

Indian companies have taken various CSR initiatives to address social and environmental issues. Some of the common initiatives include:

1. Education: Providing support to schools, colleges, and educational institutions to improve access to education and learning opportunities for underprivileged children.

2. Healthcare: Supporting healthcare facilities and programs, particularly in rural areas, to improve access to quality healthcare services.

3. Environment Protection: Implementing environmentally sustainable practices, supporting renewable energy projects, and promoting environmental awareness.

4. Poverty Alleviation: Supporting programs aimed at reducing poverty and improving the standard of living of people in need.

5. Women Empowerment: Supporting programs aimed at promoting gender equality and empowering women through education, livelihood, and entrepreneurship initiatives.

6. Community Development: Supporting infrastructure development and community welfare programs in rural areas, such as building roads, water supply systems, and healthcare facilities.

7. Disaster Relief: Providing support during natural disasters, such as floods, earthquakes, and cyclones, to help affected communities recover and rebuild.

These are some of the initiatives taken by Indian companies in their CSR efforts. Companies also collaborate with NGOs, government bodies, and other organizations to maximize the impact of their CSR initiatives. The focus on CSR is increasing in India and companies are making efforts to ensure that their initiatives are sustainable and have a long-lasting impact on the communities they serve.