1. Eradicating extreme hunger and poverty
2. Promotion of education
3. Promoting gender equality and empowering women
4. Reducing child mortality and improving maternal health
5. Combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases
6. Ensuring environmental sustainability
7. Employment enhancing vocational skills
8. Social business projects
9. Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government or the State Governments for socio-economic development and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women
1.9.3 Strengths
• Around 2,500 companies fall into this “mandatory” CSR category which will make CSR activities spending in the first year between Rs. 9 to 10 thousand crores, enhancing resources spent in social welfare, considerably.
• The requirement for a CSR Committee will be a key way for companies to set out a strong strategy that links to their core business. This will also ensure a gradual shift from the traditional charity model to a more strategic CSR model that fits in with the long term objectives of the company
• Often taxpayers are unsure how much of their tax money actually trickles down to the bottom and how it is used. This bill gives them the freedom to use their money for their chosen social cause, and see the impact for themselves.
• Most companies will be able to develop a CSR strategy simply because every year they will be publicly stating what they did or did not do. Reporting CSR spends in their annual reports and making it public is a measure of good corporate governance.
1.9.4 Weaknesses
• CSR does not have a clear definition given by the Government, although there are nine principles where areas like development, human rights and inclusive growth have been highlighted.
• The new Companies Bill needs clear guidelines and rules on how to calculate the mandatory two percent CSR spending.
• If a company fails to meet the desired standard; it may get away by providing the reason. Such a statement may, in practice, defeat the very purpose of the legislation
• The imposition takes out the sanctity of CSR making it more of a forced exercise and a new form of tax on profits.