Context: Corporate India’s CSR expenditure increased by 17% year-on-year to ₹40,794 crore in FY2025, according to a report based on Ministry of Corporate Affairs data.
Explanation
- Corporate Social Responsibility (CSR) refers to a company’s statutory responsibility to contribute towards social, environmental and sustainable development.
- Under the Companies Act, 2013 (Section 135), eligible companies must spend at least 2% of the average net profits of the preceding three financial years on CSR activities.
- CSR provisions apply to companies with net worth ≥ ₹500 crore, turnover ≥ ₹1,000 crore, or net profit ≥ ₹5 crore in any financial year.
- Schedule VII of the Companies Act lists eligible CSR activities such as education, healthcare, gender equality, sanitation, rural development, environmental sustainability and disaster management.
- CSR Committee, Board oversight, annual disclosure and transfer of unspent CSR funds are key compliance requirements.
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