What is the full form of CSR
CSR: Corporate Social Responsibility
CSR stands for Corporate Social Responsibility. It refers to a business model that makes a company socially accountable to its stakeholders and the public and makes it conscious of the impact they have on different aspects of society such as economic, social and environmental.
CSR requires companies to manage their business processes to produce an overall positive impact on society. It says that along with doing business, a company should also be performing their social duties that may include:
So, we can say that CSR aims to integrate socially beneficial programs and practices into a corporation's business model and culture. It strictly suggests that it is the responsibility of the corporations operating within society to contribute towards economic, social and environmental development that creates a positive impact on society. The government keeps a close eye on CSR aspect of companies as it needs the involvement of the private sector to help the weaker section of the society and to protect the environment.
India is the first country that mandated and quantified CSR expenditure through the Companies Act, 2013 legislation. This step was taken to engage the businesses with the national development agenda. The details on CSR is mentioned in section 135 of the Companies Act, 2013. This act came into force from 1 April 2014. It states that every company private or public limited with a net worth of Rs. 500 crores or a turnover of Rs. 1,000 crores or net profit of Rs. 5 crore is required to spend at least 2% of its average net profit for the last three financial years on CSR activities.
The corporations are required to set up a CSR committee that makes CSR policy and plan activities approved by the board. These activities should be in accordance with the activities mentioned in Schedule VII of the act. The act also includes penal provisions for the corporations that fail to abide by the norms of CSR.
At present, in the last two years, after being mandated to invest a portion of their profit toward community development, the Indian companies have invested on a large scale in various social activities such as healthcare and sanitation, education and skill development, rural development, drinking water, projects to protect environment and more. For example, the Corporate Affairs Minister Arun Jaitley on 1 March 2016 in his written reply to Rajya Sabha told that over 400 listed firms have claimed spending around 6000 crore in 2014-15 for CSR activities.