In this article, we will discuss Corporate Social Responsibility (CSR) – Legal-backing in India. So, let’s get started.
Corporate Social Responsibility (CSR) – Legal-backing in India
- In India, the concept of CSR is governed by clause 135 of the Companies Act, 2013.
- India is the first country in the world to mandate CSR spending along with a framework to identify potential CSR activities.
- The CSR provisions within the Act is applicable to companies with an annual turnover of 1,000 crore and more, or a net worth of Rs. 500 crore and more, or a net profit of Rs. 5 crore and more.
- The Act requires companies to set up a CSR committee which shall recommend a Corporate Social Responsibility Policy to the Board of Directors and also monitor the same from time to time.
- The Act encourages companies to spend 2% of their average net profit in the previous three years on CSR activities.