What is the full form of CSR in company law?

CSR stands for "Corporate Social Responsibility", the idea that companies should contribute to the welfare of society and the environment, and not only make profits.

CSR law in India:

• India became the first country in the world to make CSR spending mandatory by law, under Section 135 of the Companies Act, 2013.
• The CSR provisions came into force on 1 April 2014.

Which companies must spend on CSR:

Companies with any one of the following in the preceding financial year:

• Net worth of 500 crore rupees or more; or
• Turnover of 1,000 crore rupees or more; or
• Net profit of 5 crore rupees or more.

How much they must spend:

• At least 2 per cent of their average net profits of the preceding three financial years on CSR activities.
• They must form a CSR Committee of the Board (unless the required CSR amount is up to 50 lakh rupees).

The 2019 amendment requires that unspent CSR money be transferred to a special account or to a fund listed in Schedule VII (such as the PM CARES Fund or the PM's National Relief Fund), and made non-compliance a civil offence with penalties.

Permitted activities (Schedule VII):

• Ending hunger and poverty, and promoting health care and sanitation.
• Promoting education, including special education and employment-enhancing vocational skills.
• Promoting gender equality and empowering women.
• Ensuring environmental sustainability and protecting flora and fauna.
• Protecting national heritage, art and culture.
• Measures for the benefit of armed forces veterans and their families.
• Training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports.
• Contributions to the PM CARES Fund and disaster management, and to technology incubators.
• Rural development and slum area development.

Impact:

Indian companies have spent more than 1.5 lakh crore rupees on CSR since 2014. Education and health receive the largest shares.

Maharashtra receives the largest share of CSR spending among states.

Related abbreviations:

• MCA: Ministry of Corporate Affairs.
• ESG: Environmental, Social and Governance (standards for responsible investing).
• BRSR: Business Responsibility and Sustainability Report, made mandatory by SEBI for the top 1,000 listed companies from 2022-23.

Why not the other options?

• ✗"Company Service Regulation" is not the correct expansion.
• ✗"Corporate Standard Reporting" is not the correct expansion.
• ✗"Commercial Sector Reform" is not the correct expansion.