Government’s Decision on CSR spending

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Context: The Government has decided to expand the scope of CSR 2 percent spending.

GS- 3 Indian Economy and issues relating to planning, mobilization of resources, growth,  development and employment.Inclusive growth and issues arising from it.


Now CSR 2% fund can be spent on incubators funded by Central or State Government or any agency or Public Sector Undertaking of Central or State Government, and, making contributions to public-funded Universities, IITs, National Laboratories and Autonomous Bodies (established under the auspices  of ICAR, ICMR, CSIR, DAE, DRDO, DST, Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting SDGs.

What is CSR?

·         Corporate Social Responsibility (CSR) is referred to as a corporate initiative to assess and take responsibility for the company's effects on the environment and impact on social welfare and to promote positive social and environmental change.

·         It efforts that go beyond what may be required by regulators.

·         The income is earned only from society and therefore it should be given back.

What is the legal mandate?

·         Under Companies Act, 2013 any company with a

1.    net worth of the company to be Rs 500 crore or more or

2.    turnover of the company to be Rs 1000 crore or more or

3.    net profit of the company to be Rs 5 crore or more.

has to spend at least 2% of last 3 years' average net profits on CSR activities as specified in Schedule VII and as amended from time to time. The rules came into effect from 1 April 2014.

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