Corporate Social Responsibility
What is CSR?
- Corporate Social Responsibility (CSR) is a business philosophy that dictates that companies around the globe should deviate from the narrow path of chasing only financial gains and wealth buildup and embark on a journey of sustainable development.
- It includes community welfare, ethical corporate conduct, climate action, defending the socio-economic rights of marginalised sections of society, among other aspects.
CSR in India
- India harbours one of the earliest and richest traditions of CSR in the world in the form of philanthropy.
- We can find Chanakya, also called Kautilya, the cardinal force behind Mauryan Imperialism, commenting and emphasising on the importance of observing ethical practices and principles while conducting commercial activities.
- Our scriptures have also repeatedly echoed the importance of sharing business earnings with the deprived segments of the society.
- In modern India, CSR was attributed with a whole new dimension with the “Trusteeship Theory” of Mahatma Gandhi, which considered the businessmen of India as trustees of trusts that looked after public welfare.
- India is the first country in the world to make CSR mandatory, following an amendment to The Company Act, 2013 in 2014.
- Any company that has a net worth of at least Rs 500 crore, a turnover of Rs 1,000 crore or a net profit of Rs 5 crore is obliged to spend 2% of its average profits over the last three years on CSR.
- Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger as part of their CSR compliance, as regulated by the law.
- In 2021, the Ministry of Corporate Affairs amended the rules of CSR.
- According to the new rules, non-compliance to the CSR rules and obligations will no longer be treated as a criminal offence. These will now be treated as civil wrongs.
- A company may engage International Organisations for designing, monitoring and evaluation of the CSR projects and for capacity building of their own personnel for CSR.
- Any surplus income being generated through a company’s CSR activities can not form part of the company’s profit. The surplus shall be reinvested into the same project or shall be transferred to the Unspent CSR Account.
- Any CSR expenditure that exceeds the required amount can be carried forward to the next three years.
Why in News?
- Security Printing and Minting Corporation of India (SPMCIL), a government printing and minting agency, conducted various initiatives under its CSR programme.
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