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The IUP Journal of Corporate Governance
A Critical Analysis of the Provisions of Corporate Social Responsibility
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Section 135 of the Companies Act, 2013 mandates that a company having net worth of 500 cr or more, or turnover of 1,000 cr or more or a net profit of 5 cr or more should spend 2% of its average net profit on Corporate Social Responsibility (CSR). This provision legislating social responsibility by companies in India started a debate regarding the logic behind such mandate because the meaning of the word CSR is itself not clear and different scholars and practitioners have defined the word in different ways. The meaning of the word CSR differs from time to time and place to place. Hence, it also becomes difficult to implement such a law as different stakeholders like companies, implementing agencies, beneficiaries, academicians and regulators interpret it in their own way. The present paper provides a critical analysis of the Companies Act, 2013, Companies (CSR) Rules, 2014, Schedule VII of the Companies Act, 2013 and various other notifications issued by the Ministry of Corporate Affairs. The paper also highlights the intent of the Government of India to incorporate provisions mandating CSR by companies in India.

 
 
 

India has become the first country in the world that has made spending on Corporate Social Responsibility (CSR) mandatory.1 The new Companies Act, 2013 (the Act) that came into effect from April 1, 2014, replaced the six-decade old legislation Companies Act, 1956. Section 135 of the Act contains provisions mandating companies to spend an amount on CSR; Schedule VII of the Act enumerates the activities that can be undertaken under CSR; and Companies (CSR Policy) Rules, 2014 prescribe the manner in which the companies can undertake their CSR projects/programs/activities.

There has been extensive research on the determinants of corporate environmental disclosures in European and North American contexts (Aerts et al., 2008), but research on voluntary environmental disclosures in developing countries, though has been increasing, requires more intensive investigation (Elijido, 2011). The present study deals with voluntary environmental disclosure among polluting and non-polluting industries in the Indian context. To specify the model in the context of the developing country, the literature has been extensively referred mostly in the context of developed as well as developing countries.

 
 
 

Corporate Governance Journal,Corporate Social Responsibility, Critical Analysis, Provisions Under Companies