Multiple-choice questions (MCQs) with answers on “Corporate Social Responsibility (CSR) in India” for the Civil Services Examination

What does CSR stand for in the context of business practices?
- A) Corporate Social Responsibility
- B) Corporate Service Responsibility
- C) Corporate Safety and Reliability
- D) Corporate Sustainable Reform
- Answer: A) Corporate Social Responsibility
Which Indian law mandates Corporate Social Responsibility (CSR) for companies?
- A) Companies Act, 2013
- B) Indian Companies Act, 1956
- C) Income Tax Act, 1961
- D) Securities Contract Regulation Act, 1956
- Answer: A) Companies Act, 2013
Under the Companies Act, 2013, which companies are required to spend on CSR activities?
- A) All companies irrespective of size
- B) Companies with a net worth of ₹500 crore or more
- C) Companies with a turnover of ₹1,000 crore or more
- D) Companies with a net profit of ₹5 crore or more
- Answer: C) Companies with a turnover of ₹1,000 crore or more
What percentage of profits must companies allocate for CSR activities as per the Companies Act, 2013?
- A) 1%
- B) 2%
- C) 3%
- D) 5%
- Answer: B) 2%
Which of the following is NOT considered a focus area for CSR under the Companies Act, 2013?
- A) Education
- B) Health care
- C) Entertainment
- D) Rural development
- Answer: C) Entertainment
Which of the following is a primary objective of CSR activities?
- A) Maximizing shareholder value
- B) Reducing operational costs
- C) Contributing to sustainable development
- D) Increasing market share
- Answer: C) Contributing to sustainable development
Which government body is responsible for the enforcement of CSR provisions in India?
- A) Ministry of Corporate Affairs
- B) Ministry of Finance
- C) Reserve Bank of India
- D) Securities and Exchange Board of India
- Answer: A) Ministry of Corporate Affairs
What is the role of the CSR Committee in a company?
- A) To oversee day-to-day operations
- B) To monitor and recommend CSR activities
- C) To audit financial statements
- D) To handle investor relations
- Answer: B) To monitor and recommend CSR activities
Which of the following organizations is responsible for drafting the CSR guidelines in India?
- A) National Bank for Agriculture and Rural Development
- B) Institute of Chartered Accountants of India
- C) Ministry of Corporate Affairs
- D) Planning Commission
- Answer: C) Ministry of Corporate Affairs
Which act introduced CSR spending as a mandatory requirement for companies in India?
- A) The Companies Act, 2013
- B) The Companies Act, 1956
- C) The Income Tax Act, 1961
- D) The Foreign Contribution Regulation Act, 2010
- Answer: A) The Companies Act, 2013
Which of the following is a recognized CSR activity under Indian regulations?
- A) Luxury gifts for employees
- B) Hosting company parties
- C) Providing skill development training
- D) Increasing executive bonuses
- Answer: C) Providing skill development training
Which of the following is an example of a CSR initiative?
- A) Increasing the price of a product
- B) Investing in renewable energy projects
- C) Expanding business operations in new markets
- D) Enhancing advertising budgets
- Answer: B) Investing in renewable energy projects
The Companies Act, 2013 requires companies to report their CSR activities in which document?
- A) Annual Report
- B) Shareholder’s Agreement
- C) Prospectus
- D) Memorandum of Association
- Answer: A) Annual Report
Which section of the Companies Act, 2013 deals specifically with CSR?
- A) Section 135
- B) Section 149
- C) Section 177
- D) Section 182
- Answer: A) Section 135
Which of the following is an eligible expenditure under CSR as per the Companies Act, 2013?
- A) Political donations
- B) Corporate sponsorships
- C) Projects promoting education
- D) Sponsoring sports events
- Answer: C) Projects promoting education
Which of the following initiatives is eligible under CSR as per the Indian regulations?
- A) Personal charitable donations by executives
- B) Development of sports infrastructure
- C) Organizing corporate parties
- D) Marketing campaigns
- Answer: B) Development of sports infrastructure
What is the primary objective of CSR activities in India?
- A) Enhancing company profitability
- B) Reducing tax liabilities
- C) Contributing to social and environmental sustainability
- D) Increasing brand visibility
- Answer: C) Contributing to social and environmental sustainability
Which of the following is a typical CSR focus area in India?
- A) Luxury lifestyle services
- B) Water conservation
- C) Stock market investments
- D) Corporate mergers
- Answer: B) Water conservation
What does the term ‘CSR policy’ refer to in the context of the Companies Act, 2013?
- A) A policy on employee recruitment
- B) A policy outlining the company’s approach to CSR activities
- C) A policy on financial accounting
- D) A policy on marketing strategies
- Answer: B) A policy outlining the company’s approach to CSR activities
Which of the following can be a CSR activity under the Companies Act, 2013?
- A) Donations to political parties
- B) Financial support to NGOs for health care
- C) Increasing executive salaries
- D) Investment in luxury goods
- Answer: B) Financial support to NGOs for health care
The CSR provisions under the Companies Act, 2013 apply to which type of companies?
- A) Private limited companies
- B) Public limited companies only
- C) Companies meeting specified criteria based on turnover or profit
- D) Non-profit organizations
- Answer: C) Companies meeting specified criteria based on turnover or profit
Which of the following is NOT a focus area for CSR under the Companies Act, 2013?
- A) Promoting gender equality
- B) Eradicating hunger and poverty
- C) Supporting luxury brand promotions
- D) Environmental sustainability
- Answer: C) Supporting luxury brand promotions
What is the primary role of the CSR Committee in a company?
- A) Implementing the company’s marketing strategy
- B) Reviewing and approving the CSR policy
- C) Managing day-to-day operations
- D) Conducting annual financial audits
- Answer: B) Reviewing and approving the CSR policy
Under CSR regulations, which of the following is a legitimate expenditure?
- A) Marketing and advertising expenses
- B) Developing public infrastructure
- C) Sponsoring company events
- D) Executive training programs
- Answer: B) Developing public infrastructure
Which act introduced mandatory CSR reporting for large companies in India?
- A) The Companies Act, 2013
- B) The Indian Trusts Act, 1882
- C) The Companies Act, 1956
- D) The Foreign Contribution Regulation Act, 2010
- Answer: A) The Companies Act, 2013
Which of the following is NOT a permissible CSR activity according to Indian regulations?
- A) Education and skill development programs
- B) Rural development projects
- C) Contributions to political campaigns
- D) Environmental conservation efforts
- Answer: C) Contributions to political campaigns
The Companies Act, 2013 requires companies to spend on CSR activities within how many years?
- A) 1 year
- B) 2 years
- C) 3 years
- D) 5 years
- Answer: B) 2 years
Which entity in a company oversees CSR compliance and implementation?
- A) The Audit Committee
- B) The Compensation Committee
- C) The CSR Committee
- D) The Risk Management Committee
- Answer: C) The CSR Committee
Which sector has been significantly impacted by CSR initiatives in India?
- A) Retail
- B) Agriculture
- C) Information Technology
- D) Education and health care
- Answer: D) Education and health care
What happens if a company fails to spend the required amount on CSR activities?
- A) It faces criminal charges
- B) It must explain the reasons for non-compliance in its annual report
- C) It is penalized with fines immediately
- D) It loses its business license
- Answer: B) It must explain the reasons for non-compliance in its annual report

These questions cover various aspects of CSR in India, including legal requirements, focus areas, and implementation challenges.

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