Q. With reference to the Corporate Social Responsibility (CSR) in India, consider the following statements:
1.It is mandatory for companies meeting certain financial thresholds.
2.Eligible companies must spend 2% of average net profits on CSR activities.
3.Agriculture is one of the focus areas for CSR activities listed under Schedule VII of the Companies Act, 2013.
4.Securities and Exchange Board of India (SEBI) is responsible for tracking CSR-related expenditure by eligible companies.
How many of the statements given above are correct?
Explanations-
Statements 1 and 2 are correct. According to Section 135 of the Companies Act, 2013, companies that meet specific financial criteria (net worth of ₹500 crore or more, turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more) are required to spend on CSR activities. Companies that meet the financial thresholds must spend at least 2% of their average net profits from the preceding three financial years on CSR activities.
Statements 3 and 4 are incorrect. Agriculture is not explicitly listed as a separate focus area under Schedule VII of the Companies Act for CSR activities. However, CSR can indirectly support agriculture through related areas like environmental sustainability, rural development, and livelihood enhancement projects. The Ministry of Corporate Affairs (MCA) oversees and tracks CSR-related expenditures by eligible companies under the Companies Act, 2013.
Source: The Hindu
