Introduction Corporate Social Responsibility (CSR) is an integral part of business operations, growing in importance in India. It allows companies to initiate projects, programs, or activities that contribute to social welfare while ensuring profitability. India, with its fast-growing economy and socio-economic challenges, provides a unique landscape for corporate engagement in CSR.

Company Registration and Regulatory Framework Company registration in India is overseen by the Ministry of Corporate Affairs (MCA). Each state has a Registrar of Companies (ROC) to regulate corporate compliance. The Companies Act, 2013, governs the incorporation and functioning of companies, with approvals granted by the Central Registration Centre (CRC), Manesar.

Importance of CSR The CSR Committee is responsible for approving and implementing CSR policies. Companies must disclose their CSR policies, upload details online, and ensure the statutory spending requirement is met. Indian companies must allocate at least 2% of their average net profit over the past three financial years towards CSR activities, including poverty eradication, education, gender equality, and contributions to government funds.

Benefits of CSR

• Enhanced brand recognition
• Increased sales and customer loyalty
• Improved financial performance
• Organizational development
• Greater capital access
• Reduced operating costs

CSR Committee and Policy The CSR Committee is responsible for:

1. Formulating and recommending CSR policies detailing company activities.
2. Recommending the budget for CSR activities.
3. Ensuring adherence to the CSR policy.
4. Establishing a transparent monitoring system for CSR projects.

CSR Committee Composition

• Three or more directors, including at least one independent director.
• If no independent director is required, at least two directors.
• For foreign companies, at least two representatives, one being a resident in India.

Role of the Board of Directors in CSR

1. Approving the CSR policy and reporting its details in the board report.
2. Ensuring implementation of the CSR policy.
3. Disclosing CSR committee membership in board reports.
4. Ensuring a minimum of 2% net profit spending on CSR projects in India.

CSR Activities CSR initiatives may include:

1. Eradicating hunger, poverty, and malnutrition, improving healthcare, and promoting hygiene.
2. Supporting education, skill development, and livelihood enhancement.
3. Promoting gender equality and providing shelters for women and orphans.
4. Ensuring environmental sustainability and preserving natural resources.
5. Protecting and restoring India’s cultural and historical heritage.
6. Supporting veterans, war widows, and armed forces dependents.
7. Promoting sports, including Paralympic and Olympic events.
8. Contributing to the PM CARES Fund and other government initiatives for underprivileged communities.
9. Funding scientific and technological research in collaboration with government institutions.
10. Supporting higher education institutions like IITs and research organizations.
11. Undertaking rural development projects.
12. Developing slum areas.
13. Engaging in disaster management initiatives.

New Role of the CSR Committee and Policy Requirements The CSR committee is required to formulate and recommend an annual action plan. The board of directors may revise this plan as needed. The CSR policy must include:

1. Approved CSR initiatives.
2. Methods for project execution.
3. Budget utilization and timelines.
4. Monitoring and reporting mechanisms.
5. Impact assessment and evaluation of projects.

CSR plays a crucial role in fostering sustainable development while strengthening corporate reputation and accountability. By aligning business strategies with social welfare, companies contribute to economic growth and societal well-being.