Read the following passage and answer the questions based on the passage :
Corporate Social Responsibility (CSR) has evolved from being a peripheral philanthropic gesture to an integral strategic imperative in contemporary business ecosystems. Modern corporations are increasingly cognizant of their multifaceted responsibilities—not only to shareholders but also to employees, consumers, communities, and the environment. This paradigm shift reflects a recognition that long-term profitability and sustainability are inextricably linked to ethical conduct and inclusive growth. CSR transcends token charity; it encompasses deliberate initiatives aimed at environmental stewardship, equitable labour practices, transparent governance, and community development. For instance, corporations may engage in afforestation drives, fund educational scholarships, ensure fair wages, or invest in renewable energy solutions. Such undertakings are not merely altruistic—they bolster corporate reputation, foster consumer loyalty, and mitigate regulatory risks. In some jurisdictions, like India, CSR has been legislated, mandating certain profit thresholds to be reinvested into socially beneficial projects, thereby institutionalizing moral capitalism. However, genuine CSR is distinguished from superficial public relations exercises by its intent, consistency, and impact measurement. Tokenistic CSR—where companies engage in isolated acts of giving to polish their public image—can often be counterproductive, exposing ethical hollowness when scrutinized. Conversely, purpose-driven CSR, embedded into core business strategies, can catalyze innovation and expand market reach, especially in underserved regions. Furthermore, stakeholders—particularly the socially conscious millennial and Gen Z demographics—now scrutinize corporate behaviour with unprecedented vigilance. With social media amplifying accountability, any dissonance between a company’s stated values and its actions can provoke swift reputational damage. Therefore, CSR today is as much about risk mitigation as it is about value creation. Ultimately, the most impactful CSR initiatives are those that align profit motives with societal advancement. When businesses act not merely as economic entities but as responsible social agents, they contribute meaningfully to holistic progress, bridging the chasm between commerce and conscience.
What is the role of legislation in CSR according to the passage?
- (a)It promotes shareholder profits
- (b)It enforces minimum standards
- (c)It abolishes business taxes
- (d)It restricts competition
Answer
Why
Correct — B. The passage's sentence on legislation: "In some jurisdictions, like India, CSR has been legislated, mandating certain profit thresholds to be reinvested into socially beneficial projects, thereby institutionalizing moral capitalism."
To mandate is to make compulsory, and 'certain profit thresholds' are levels fixed in advance. The law sets a floor that companies must meet.
A compulsory floor is a minimum standard, enforced → option (b).
Why the others are wrong
- (a)It promotes shareholder profits — The mandate sends profit into socially beneficial projects. Nothing in the sentence is about increasing what shareholders earn.
- (c)It abolishes business taxes — The passage never mentions taxes. The law it describes adds an obligation, to reinvest profit in social projects, and abolishes nothing.
- (d)It restricts competition — Competition is not discussed anywhere in the passage. The law's stated effect is 'institutionalizing moral capitalism', not limiting rivals.
Concept
A detail question: the answer sits in one sentence, and the keyed option restates it in other words.
Match them piece by piece: mandating → enforces, certain profit thresholds → minimum standards. The wrong options bring in taxes, competition and shareholder gain, none of which that sentence contains.
Institutionalizing means making something a formal, established part of a system. Here the law turns voluntary giving into a requirement.
In India the law is Section 135 of the Companies Act, 2013. Companies above set net-worth, turnover or net-profit thresholds must spend at least 2% of their average net profit of the three preceding financial years on CSR.
The question itself is answered from the passage alone.
Key facts
- The passage: in some jurisdictions, like India, CSR has been legislated, mandating certain profit thresholds to be reinvested into socially beneficial projects.
- To mandate is to make something compulsory by law or official order.
- India's CSR spending rule is Section 135 of the Companies Act, 2013.
- Under it, qualifying companies must spend at least 2% of their average net profit of the three preceding financial years on CSR.
Study next
Common traps
- Choosing shareholder profits because the sentence mentions profit — that profit is reinvested in social projects.
- Taking 'institutionalizing moral capitalism' as a claim about markets or competition — it means the law makes ethical spending a formal rule.
The same sentence rules out a wrong option at 15 Sep 2025, 16:00, English Q.15, on this passage: It is mandated in all countries fails, because the law is limited to 'some jurisdictions, like India'.
Related PYQs
No directly related past PYQ was found.