Glossary
CSR
The 2% statutory spend Indian companies over a size threshold owe to social sector work each year.
Corporate Social Responsibility ("CSR") in the Indian context is the statutory obligation created by Section 135 of the Companies Act, 2013: any company with net worth above ₹500 crore, turnover above ₹1,000 crore, or net profit above ₹5 crore in any of the three preceding financial years must spend at least 2% of its average net profit on activities listed in Schedule VII of the Act.
Schedule VII is broad — education, healthcare, poverty eradication, environmental sustainability, women's empowerment, rural development, technology incubation and more — but the receiving NGO must hold a valid CSR-1 registration with the MCA before the company can book the transfer against its CSR obligation.
Unspent CSR outlay in any year must be carried forward and spent within three years, and — for "ongoing projects" — parked in a separate CSR Unspent Account within the financial year in which it was earmarked. Unspent, uncommitted balances at the end of three years must be transferred to a central government fund.