3% increase in spending under ‘Corporate Social Responsibility’

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3% increase in spending under ‘Corporate Social Responsibility’

3% increase in spending under ‘Corporate Social Responsibility’

Corporate Social Responsibility (CSR) spending has registered a growth of 3% in FY21.

According to a recent report by Credit Rating Information Services of India Limited (CRISIL), expenditure under Corporate Social Responsibility (CSR) grew by 3.62 per cent to Rs 22,000 crore in FY21.

Corporate Social Responsibility (CSR

  • CSR refers to a commitment by businesses to integrate social and environmental concerns into their business operations.
  • India has become the first country which has declared a legal responsibility under its new Companies Act 2013 to undertake CSR activities and compulsorily report on CSR initiatives.

Companies (CSR Policy) Amendment Rules, 2021

  • The negative attributes i.e. activities carried out in the normal course of business, political contribution etc. will not be included in the definition of CSR.
  • Management of unspent CSR amount at the end of the financial year depends on the fact whether the project is an operational project or not.
  • The Board is bound to ensure that the funds disbursed are utilized for the purposes permitted. Simultaneously, he will also oversee the implementation (fund allocation and timelines) of the ongoing projects.
  • It is mandatory for companies to carry out mandatorily impact assessment for CSR projects.

CSR Applicability

Mandatory for a company having a net worth of Rs 500 crore or more or turnover of Rs 1000 crore or more or having a net profit of Rs 5 crore or more during a financial year. The Company shall spend in each financial year at least 2% of the average net profit of the Company made during the immediately preceding three financial years in pursuance of its Corporate Social Responsibility Policy.

Source – The Hindu

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