Context: There was a split in Rajya Sabha over a Bill on mandating 25% of corporate social responsibility (CSR) funds used for restoration, management and maintenance of ancient monuments and archaeological sites.
What are CSR Funds?

• Corporate Social Responsibility is a concept, whereby companies decide voluntarily to contribute to a better society and a cleaner environment.
• The companies integrate social and other useful concerns in their business operations for the betterment of the stakeholders.

CSR motivates companies to contribute socially, economically and environmentally by engaging in acts like

• Engaging members of local community
• By using Socially Responsible Investment (SRI)
• Develop an amicable relationship with employees and consumers
• Engage in actions which are protecting and sustaining the environment.

Need of CSR

CSR is responsible for generating goodwill to companies either directly or indirectly. These include

• Making employees more loyal and help companies retain them in the long run.
• Make companies more legitimate and help them in accessing a greater market share.
• Bolster the goodwill of companies amongst the general public and help in strengthening their brand value.
• Help in the stabilization of stock markets in both the short and long run.

Benefits of CSR

• CSR helps companies and their shareholders to help in the development of a country’s economy on a macro-level.
• The Standard of living gets better with the introduction of more amenities.
• Companies engage in large-scale capacity building due to which the society becomes more prosperous and wealthier.
• Creates a more balanced world and healthier environmental systems.

CSR Laws in India

• The Companies Act, 2013 made CSR a compulsory act.

Under Section 135 of the new act, CSR is compulsory for all companies- government or private or they meet any one or more of the following fiscal criterions

• The net worth of the company should be Rupees 500 crores or more.
• The annual turnover of the company should be Rupees 1000 crores or more.
• Annual net profits of the company should be at least Rupees 5 crores.

List of Permitted Activities under the CSR is included in Schedule VII of the Companies Act, 2013

Features of CSR Laws

• Money utilized for CSR purposes are to be included in the annual profit-loss report released by the company.
• The CSR rules will include subsidiary companies, holdings and other foreign corporate organizations, involved in business activities in India.