Corporate social responsibility, or CSR, is defined as "the continuing commitment by business to contribute to economic development while improving the quality of life of the workforce and their families as well as of the community and society at large" by World Business Council for Sustainable Development. As per the Companies Act, 2013, the Ministry of Corporate Affairs notified the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014, which came into effect from April 1, 2014. As per the rules, every company which has either net worth of ₹500 crore or a turnover of ₹1,000 crore or a net profit of ₹5 crore needs to spend at least 2 per cent of its average net profit in the last three financial years on CSR activities.
In the BSE 500 companies, as per the provision, 387 companies came under the CSR purview, but only 43 per cent of them spent the budgeted amount. In the coming times, those lagging behind may have to spend more on CSR to catch up with the mandate.
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