CSR UPSC - Corporate Social Responsibility

A solid understanding of the CSR UPSC is crucial for every IAS aspirant. Thus, it becomes imperative for every student to remain familiar with this topic to better prepare for the UPSC prelims and mains examination.

Understanding CSR (Corporate Social Responsibility)

Corporate Social Responsibility, also known as CSR, refers to the concept implying that it is the responsibility of every organization within the community to add to their economic, social, and environmental growth. In addition, according to the Companies Act 2013, it becomes the primary accountability of every company to quantify their CSR expenses, and India is the first nation to create this legislation.

Furthermore, the inclusion of Corporate Social Responsibility (CSR) is an initiative by the Indian Government to engage the businesses with the federal development plan. Section 135(1) of this act specifies thresholds to identify companies that are directed to constitute a CSR Committee and companies in the immediately preceding financial year of which:

• The company's net worth was INR 500 crore or more.
• Yearly business turnover is INR 1000 Crore or more.
• The business's Net profit is INR 5 Crore or more.

In addition, as per the Companies (Amendment) Act, 2019, Corporate Social Responsibility (CSR) applies to companies before finishing three financial years. As per this regulation, businesses falling within the CSR threshold must pay around 2% of their average net earnings every financial year.

For companies that have not finished their three financial years, average net earnings gained must be factored in the former financial years. The Corporate Social Responsibilities (CSR) exercises in the country should not be embarked in the company's ordinary course and be regarding any of the 17 exercises of Corporate Social Responsibilities in Companies Act Schedule VII.

The principal purpose of Corporate Social Responsibility (CSR) is to promote sustainable and accountable company regulations at a comprehensive level and encourage businesses to develop innovative visions and persuasive management techniques.

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What are some CSR Activities?

The activities that organizations must undertake under CSR have been defined under Schedule VII of the Companies Act. Read this carefully to better prepare for the topic of CSR for the UPSC exam:

• Eliminating severe poverty and hunger.
• Promotion of gender equality, education, and empowering women.
• Fighting Acquired Immune Deficiency Syndrome, Human Immunodeficiency Virus, and other disorders.
• Guaranteeing environmental sustainability.
• Contribution to the PMNRF (Prime Minister's National Relief Fund) or any other development fund set up by the Indian Government for socio-economic development and relief and funds for the interest of the Scheduled Tribes, Scheduled Castes, and other minorities, backward classes, women, etc.

Corporate Social Responsibility Execution

• Companies falling under the law must transfer a report on their CSR UPSC (Corporate Social Responsibility) spending and activities.
• Those statements must include information about the business's CSR policy, the structure of its CSR board, the amount of CSR expenses, and information on the activities where they use these funds.
• If the companies do not spend the required amount, they must publicly disclose their grounds. Failure to document the grounds is punishable under the companies act.

FAQs on CSR UPSC

Q.1. What do we mean by CSR UPSC?

The phrase Corporate Social Responsibility (CSR) UPSC, in general, refers to the corporate endeavour to evaluate and take accountability for the company's outcomes on the environment and effect on social welfare.

Q.2. What is the full form of CSR?

The full form of CSR is Corporate Social Responsibility.

Q.3. What are the activities included in CSR UPSC?

The activities included in CSR are as follows -

• Eliminating severe poverty and hunger.
• Promotion of gender equality, education, and empowering women.
• Fighting Acquired Immune Deficiency Syndrome, Human Immunodeficiency Virus, and other disorders.
• Guaranteeing environmental sustainability.

Q.4. What is the threshold specified by the CSR legislation?

The threshold limit to remain complaint with CSR legislation are as follows -

• The company's net worth was INR 500 crore or more.
• Yearly business turnover is INR 1000 Crore or more.
• The business's Net profit is INR 5 Crore or more.

Q.5. Which section defines the threshold of CSR in India?

Section 135(1) of this act specifies thresholds to identify companies that are directed to constitute a CSR.