UPSC Prelims 2024 · GS Paper I
Question 50: Polity and Governance
With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements :
- 1.CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
- 2.CSR rules do not specify minimum spending on CSR activities.
Which of the statements given above is/are correct ?
AnswerUPSC’s answer is (a).
Statement 1 is correct: under the CSR rules framed under the Companies Act, activities that benefit the company directly or its employees do not count as CSR. Statement 2 is wrong: Section 135 requires a qualifying company to spend at least 2 per cent of its average net profit of the preceding three financial years on CSR. So a minimum spend is specified.
- 1. Spending that benefits the company directly or its employees does not count as CSR.
- 2. Section 135 prescribes a minimum spend of 2 per cent of average net profit.
How you could have got this
- If you were sure statement 1 is correct, (b) and (d) go: each of them leaves 1 out.
What you needed to know: Spending that benefits the company directly or its employees does not count as CSR.
- Then, if you were sure statement 2 is not correct, (c) goes: it includes 2.
What you needed to know: Section 135 prescribes a minimum spend of 2 per cent of average net profit.
Only (a) is left. This one needs every statement.
Which options go is worked out from UPSC’s key and the options, not by a model.
Why each option is right or wrong
- (a) Right: only the exclusion of self-benefiting spending is correct.
- (b) Wrong: the rules do specify a minimum of 2 per cent of average net profit.
- (c) Wrong: statement 2 is incorrect because a minimum spend exists.
- (d) Wrong: statement 1 is correct.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2024, General Studies Paper I, Series A. The paper on upsc.gov.in.