Corporate Social Responsibility (CSR)

1. The CSR provisions contained in The Companies Act, 2014, requiring

large companies meeting certain financial criteria to either comply with
the CSR spend or report non-compliance kicked in from April 1st.
2. These companies are required to spend 2% of their average net
profit of the last three years on CSR activities.
3. 10 categories of eligible activities outlined in Schedule VII of the
Companies Act, 2014 must be interpreted liberally. Activities
outlined in this schedule are wide ranging and include those relating
topromoting education, promoting preventive healthcare, rural
development and even protection of national heritage, art and
culture.

CSR Activities
1. Slum-redevelopment or housing for economically weaker sections
covered under the eligible CSR category of measures taken for
reducing inequalities faced by socially and economically
backward groups.
2. Road safety awareness, Promoting road safety awareness through
print, audio and visual media would qualify as a CSR activity under the
broad head of promoting education; providing trainers to drivers
would fall under promoting vocational skills; and social projects
like giving medical and legal aid, treatment to road accident victims
would fall under the eligible category of promoting health care.
3. Consumer protection services, consumer education and
awareness related activities would also be eligible as CSR
towardspromoting education.
4. Any project meant for development of rural India will be treated as a
rural development project and will be an eligible CSR activity.

5. Supplementing government schemes like mid-day meals would

also qualify as CSR for alleviation of poverty and malnutrition.
6. Renewable energy projects would be eligible for
promotingenvironmental sustainability.
7. Donations to IIM (A) for renovation of classrooms would be an
eligible CSR activity to promote education.
8. Salaries paid by companies to regular CSR staff and
volunteerscan also be factored into the project cost as part of the
CSR expenditure.
9. Expenditure incurred by a foreign holding company for CSR
activities in India, if routed through its Indian subsidiary, will qualify
as CSR spend of the Indian subsidiary.
10. Contribution by India Inc towards the corpus of such a trust,
registered society or towards the capital of the not-for-profit
company will also qualify as CSR spend. The conditions prescribed
are that these entities should be created exclusively for carrying out
CSR activities or the corpus should be created exclusively for carrying
out eligible CSR activities.

NOT CSR Activities

1. Events undertaken by India Inc, such as sponsoring marathons,
awards, sponsorship of TV programmes, will not qualify as eligible
CSR activities.
2. Expenses incurred by India Inc for fulfilment of any regulations
such as Labour Laws and Land Acquisition Act also would not
count as CSR expenditure.
3. Even sustainable urban development and urban public transport
system are not eligible CSR activities.
4. The final rules to the Companies Act are clear that CSR activities
donot include normal business activities.