Parliament has passed a new bill which is the first major overhaul of Company law in more than 50 years. The legislation strengthens accounting standards and shareholder rights, and makes it mandatory for companies with market capitalization of more than Rs. 500 crore to spend 2 per cent of their annual net profits on Corporate Social Responsibility (CSR), such as social work or charity.

Schedule 7 of the Act lists out activities, which a qualified company can take up in discharging its CSR and includes promotion of education, promoting of gender equality and empowering women and employment
enhancing vocational skills. Section 135 and Schedule 7 specifically provide that a preference should be given to the local area where a company operates.