Question
UPSC Prelims 2024 Question:
With reference to Corporate Social Responsibility (CSR) rules in India,
consider the following statements:
- CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
- CSR rules do not specify minimum spending on CSR activities.
Which of the statements given above is/are correct?
Answer (Detailed Solution Below)
Option 1: 1 only
Detailed Solution
Explanation:
- Corporate Social Responsibility (CSR) activities are meant to benefit society, not the company itself. Schedule VII of the Companies Act, 2013 indicates the activities that can be undertaken as CSR which broadly relates to Health, sanitation, education, environment, sports, heritage, art and culture, rural development, slum area development, Disaster management, including relief, rehabilitation, and reconstruction activities, setting up old age homes, day care centers, measures for reducing inequalities faced by socially and economically backward groups etc. So, Statement 1 is correct.
- Companies meeting the criteria set by the Companies Act, 2013 must spend a minimum of 2% of their average net profits over three years on CSR. So, Statement 2 is incorrect.
Therefore, option (1) is the correct answer.
Subject: Economics | Indian Economy
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