On April 1, 2014, India became the first country in the world to legally mandate Corporate Social Responsibility. CSR, as stipulated under Section 135 of the Companies Act, 2013, mandates corporates to allocated 2% of their average net profit from the previous three years towards initiatives aimed at fostering sustainable development, addressing societal needs and promoting positive impacts on communities.

• • Net worth exceeding Rs. 500 Cr or
• • Turnover surpassing Rs. 1000 Cr or
• • Net profit exceeding Rs. 5.00 Cr or
  
  If the company has not completed three financial years since its incorporation, it must spend 2% of its average net profits made during the immediately preceding financial years.

The Government of India provides the broad framework for Corporate Social Responsibility (CSR) through Section 135 of the Companies Act, 2013 (‘Act’), Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. Schedule VII of the Act indicates the activities that can be undertaken as CSR which broadly relates to Health, sanitation, education, environment, sports, heritage, art and culture, rural development, slum area development, Disaster management, including relief, rehabilitation, and reconstruction activities, setting up old age homes, day care centers, measures for reducing inequalities faced by socially and economically backward groups etc. The Ministry vide General Circular no. 21/2014 dated 18th June, 2014 clarified that items mentioned in Schedule VII are broad based and can be interpreted liberally.
Activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to:-

(i) eradicating hunger, poverty and malnutrition; promoting health care including preventive health care and sanitation including contribution to the ‘Swachh Bharat Kosh’ set-up by the Central Government for the promotion of sanitation and making available safe drinking water;

(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;

(iii) promoting gender equality and empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;

(iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the ‘Clean Ganga Fund’ set-up by the Central Government for rejuvenation of river Ganga;

(v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;

(vi) measures for the benefit of armed forces veterans, war widows and their dependents, Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows;

(vii) training to promote rural sports, nationally recognized sports, paralympic sports and Olympic sports;

(viii) contribution to the Prime Minister’s National Relief Fund or Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;

(ix) (a) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; and

(b) Contributions to public funded Universities; Indian Institute of Technology (IITs); National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE); Department of Biotechnology (DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information Technology and other bodies, namely Defense Research and Development Organisation (DRDO); Indian Council of Agricultural Research (ICAR); Indian Council of Medical Research (ICMR) and Council of Scientific and Industrial Research (CSIR), engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).
(x) rural development projects.

(xi) slum area development.
Explanation- For the purpose of this item, the term ‘slum area’ shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.
(xii) disaster management, including relief, rehabilitation and reconstruction activities.

People build institutes and developing an adept human resource for the same is critical to any project that an organization is planning to undertake. More than 150 National Research Laboratories and autonomous institutions under the administrative control of CSIR, IITs, DBT, DST, ICAR, ICMR, DRDO, DAE & MEITY have nominated CSR nodal from their respective laboratories. CSR nodal shall be the focal point for interfacing with the corporates for pitching projects from their respective laboratories to seek CSR funds. Since April 2024, participating CSR nodal have been equipped with CSR centric information and knowhow regarding the CSR landscape in greater depth. The nodal's are further disseminating the CSR domain information to their scientists on type of project proposals to pitch that resonates with the strategic CSR and vision of the company. The goal is to develop internal expertise within the lab for interfacing with the industry for CSR funds. In many labs, CSR nodal along with their leaders are interfacing with their headquarters on issues like CSR registration number, Guidelines on CSR and other issues that would advance their efforts for R&D. Identification of the corporates who are willing to fund for R&D and allied areas, pitching in projects that have societal impact, building modular projects and a solid slide deck for the pitch are some of the practices that have already been adopted by CSR nodal in their respective labs. Knowledge-sharing, collaboration, and building strong networks between research institutions and corporates maximizes the potential of CSR funding and this can be enabled through respective CSR Nodal.

• • Disclosing CSR policy, committee, list of projects on the donors website
• • Impact Assessment for projects > Rs. 1.00 Cr.
• • Separate section in Annual report on CSR
• • Filing project-wise details on the Ministry of Corporate Affairs (MCA) website
• • Penalties of Rs. 1.00 Cr for company and Rs. 2.00 lakh for “officer in default” in case company fails to spend 2%

• • Donor will require regular updates and will conduct review of the project
• • Well defined project outcomes.
• • Adhering to the project timelines
• • Regular reporting of projects in form of Monthly/ Quarterly progress reports
• • Quarterly / half Yearly review meetings and site visits
• • Report challenges faced in the project in advance for mitigating it in time
• • Be transparent on project deliverables
• • Visibility & acknowledgment of contribution
• • 3rd party audits, impact assessment etc.