India: Corporate Social Responsibilities Enforcement Review

November 13, 2018

The enforcement of the provisions of the Companies Act, 2013 (hereinafter referred to as the “Act”) introduced the concept of Corporate Social Responsibility (hereinafter referred to as “CSR”). With the view to inculcate the spirit of mankind as on obligation on the company, the Act mandates for certain class of profitable enterprises to spend a share of their profits on social activities by the way of a dedicated procedure of CSR. In this way, companies integrate social and environmental concerns in their business operations.

Mandatory CSR

Following companies are required to constitute a CSR Committee for the enforcement of the policy in the said regard:

  1. having net worth of rupees five hundred crore or more, or
  2. having turnover of rupees one thousand crore or more or;
  3. having a net profit of rupees five crore or more

CSR Projects

A company make and undertake any projects aiming for the welfare of the society including, but not limited to options such as:

  • eradication of hunger/ malnutrition;
  • removal of poverty;
  • promoting healthcare and sanitation;
  • supporting education;
  • fostering employment enhancing vocational skills;
  • encouraging gender equality;
  • ensuring sustainable development of the environment;
  • protecting heritage;
  • working for the benefit of armed forces;
  • training for sports;
  • contribution for relief projects.

Panel for review

The Government has set up a high-level committee to review the framework for CSR activities and suggest a roadmap for better implementation of its provisions.[1] In order to ensure effective monitoring and evaluation of CSR by companies the committee analyses outcomes of CSR activities, programmes and projects taken up.

It has been consistently working towards adherence of CSR norms and has also taken stringent actions in the event of its non-compliance by penalizing 196 companies in the said regard .[2] In its vision to allow balanced development of the country the Government motivates the companies to pay back to the society by contributing efforts for its improvement and well-being.



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