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?

The correct option is 1 only.

Statement 1 is correct:
Under Section 135 of the Companies Act, 2013 and the Companies (Corporate Social Responsibility Policy) Rules, 2014, activities that benefit only the employees of the company and their families, or activities that benefit the company directly, are not considered CSR activities. According to Rule 4(5) of the CSR Rules, any activity that benefits the employees of the company (as defined in clause (k) of Section 2 of the Code on Wages, 2019) will not qualify as Corporate Social Responsibility.

Statement 2 is incorrect:
CSR rules in India do specify a minimum spending requirement. According to Section 135(5) of the Companies Act, 2013, every qualifying company (having net worth of rupees five hundred crore or more, or turnover of rupees one thousand crore or more, or a net profit of rupees five crore or more during any financial year) is mandated to spend, in every financial year, at least 2% of the average net profits of the company made during the three immediately preceding financial years, in pursuance of its Corporate Social Responsibility Policy.