UPSC CSE Prelims
Question 98
With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements :
- CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
- CSR rules do not specify minimum spending on CSR activities.
Which of the statements given above is/are correct ?
View correct answer and explanation
Correct answer: A
Correct Option: A (1 only)
Explanation: CSR rules exclude activities benefiting only employees or directly serving normal business operations; qualifying companies have a statutory 2%-of-average-net-profits spending requirement.
Statement / Pair / Item-wise Analysis:
1. Correct/True - Employee-only and normal-course business benefits are generally excluded from eligible CSR.
2. Incorrect/False - Section 135 requires qualifying companies to spend at least 2% of average net profits of the preceding three years, subject to prescribed rules.
Option-wise Analysis:
A. Correct-includes precisely the true/correct statements or pairs identified above.
B. Incorrect-incorrectly includes 2 (Section 135 requires qualifying companies to spend at least 2% of average net profits of the preceding three years, subject to prescribed rules.); omits correct item 1 (Employee-only and normal-course business benefits are generally excluded from eligible CSR.).
C. Incorrect-incorrectly includes 2 (Section 135 requires qualifying companies to spend at least 2% of average net profits of the preceding three years, subject to prescribed rules.).
D. Incorrect-omits correct item 1 (Employee-only and normal-course business benefits are generally excluded from eligible CSR.).