Sagar Samajik Sahayog

June 28, 2023

GS Paper III Indian Economy

Context:

The Ministry of Ports, Shipping & Waterways launched ‘Sagar Samajik Sahyog’ – the new guidelines of Corporate Social Responsibility (CSR).

About the News Guidelines:

Objectives
- To empower ports to undertake CSR activities directly
- To allow ports to initiate, undertake and expedite projects for community welfare through a framework where local communities can also become partners of development & change.
CSR Committee:
1. For the purpose of planning and implementing CSR projects, a Corporate Social Responsibility Committee shall be constituted in each major port.
2. The Committee shall be headed by the Dy. Chairperson of the Major Port and shall have 2 other Members.
CSR Plan: Each major port shall prepare a Corporate Social Responsibility Plan for every financial year, and integrate its CSR in the Business Plan with the social and environmental concerns related to the business of the entity.
CSR Budget will be mandatorily created through a Board Resolution as a percentage of net profit.
Expenditure :
- 20% of CSR expenses must be earmarked to Sainik Kalyan Board at district level, National Maritime Heritage Complex and National Youth Development Fund.
- 78% of funds should be released for the social & environmental welfare of the community in areas like drinking water, education, vocational training, skill development, electricity through non-conventional & renewable sources, health & family welfare, promotion of livelihood for economically weaker sections of society, community centres, hostels etc.
- A sum of 2% total CSR expense has been earmarked for monitoring of the projects under the CSR programmes by the Ports.

Additional Information

About Corporate Social Responsibility:

CSR is a concept that suggests that it is the responsibility of the corporations operating within society to contribute towards economic, social and environmental development that creates a positive impact on society at large.
The Companies Act, 2013 is a landmark legislation that made India the first country to mandate and quantify CSR expenditure.
The inclusion of CSR is an attempt by the government to engage the businesses with the national development agenda.
Section 135(1) of the Act prescribes thresholds to identify companies which are required to constitute a CSR Committee – those, in the immediately preceding financial year of which:
1. Net worth is Rs 500 Crore or more; or
2. Turnover is Rs 1000 Crore or more; or
3. Net profit amounts to Rs 5 Crore or more.
As per the Companies (Amendment) Act, 2019,CSR is applicable to companies before completion of 3 financial years.
Companies are required to spend, in every financial year, at least 2% of their average net profits generated during the 3 immediately preceding financial years.