Corporate Social Responsibility may be stated as the process by which the companies maintain equilibrium between their business activities and philanthropic activities in order to produce an overall positive impact on social developments. CSR is the way through a balance of economic, environmental and social requirements is achieved and thrives for sustainable development of the same. CSR makes a valuable contribution to the education of the deprived, women empowerment, elimination of poverty and hunger. It will not only enable the enterprise to gain a favorable reputation for strengthening its brand name but also allow some social justice to socially deprived class.
Applicability of Corporate Social Responsibility to Companies
India made CSR mandatory and its guidelines were included in the Companies Bill, 2011 later which got codified under the Companies Act, 2013. The CSR concept in India is governed by Section 135 of the Companies Act, 2013. As per the Act every company with net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more during any financial year is required to spend on CSR at least 2 per cent of its average net profits made in the preceding three years. As per the CSR National portal, there are 3117 Companies that have spent on CSR in the financial year 2017-18 total amount of 8365 Cr.
If the company is unable to spend its CSR funds in a given year then it is supposed to carry forward the amount unspent and spend it in the next fiscal year. The companies have to deposit there unspent CSR funds into a fund prescribed within the end of the fiscal year. This amount must be utilized within three years from the date of transfer. CSR is a thoughtful and practical way to reach a society where the Government has not reached and just by imposing a small cost to a corporate giant.