UPSC Prelims 2025Question 4Economy

Consider the following statements:
I. The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).
II. In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.
Which of the statements given above is/are correct?

Options

(a)I only
(b)II only
(c)Both I and II
(d)Neither I nor II

Correct answer: b

Decision rule

If the disclosure duty falls on listed companies, the mandating regulator is the securities regulator, not the central bank or the corporate-affairs ministry.

Explanation

Correct Answer:

(b) II only

Explanation of the Correct Answer:

Let us examine each statement:

Statement I: The Reserve Bank of India mandates all the listed companies in India to submit a Business Responsibility and Sustainability Report (BRSR).

Incorrect.
The mandate for BRSR is issued by SEBI, not the Reserve Bank of India.
As per SEBI (LODR) Regulations, the top 1,000 listed companies (by market capitalization) are required to file BRSR, not all listed companies.

Statement II: In India, a company submitting a BRSR makes disclosures in the report that are largely non-financial in nature.

Correct.
BRSR focuses on Environmental, Social, and Governance (ESG) parameters such as:
- Environmental impact
- Social responsibility
- Employee welfare
- Corporate governance
These disclosures are primarily non-financial, though some quantitative indicators may be included.

Thus, only Statement II is correct.

Why Other Options Are Incorrect

Option	Verdict	Explanation
(a) I only	Incorrect	BRSR is mandated by SEBI, not RBI.
(b) II only	Correct	BRSR disclosures are largely non-financial.
(c) Both I and II	Incorrect	Statement I is wrong.
(d) Neither I nor II	Incorrect	Statement II is correct.

Relevant Supplementary Information

Table: Business Responsibility and Sustainability Report (BRSR) – Key Aspects

Aspect	Details
Regulator	Securities and Exchange Board of India (SEBI)
Applicable Companies	Top 1,000 listed companies by market capitalization
Introduced From	FY 2022–23
Replaced	Business Responsibility Report (BRR)
Focus Areas	ESG (Environmental, Social, Governance)
Nature of Disclosures	Largely non-financial, with some quantitative indicators
Framework Basis	National Guidelines on Responsible Business Conduct (NGRBC)

Context and Current Relevance

BRSR is central to India’s ESG disclosure framework, aligning Indian capital markets with global sustainability standards.
SEBI has been progressively strengthening ESG compliance and transparency for listed entities to support responsible investing.

Key Takeaways from the Table

BRSR is mandated by SEBI, not RBI.
Applicable only to top 1,000 listed companies, not all listed firms.
Disclosures are predominantly non-financial, focusing on ESG performance.
BRSR enhances corporate transparency and sustainability accountability in Indian markets.

BRSR is a SEBI-mandated ESG disclosure, not an RBI requirement.
BRSR applies only to top 1,000 listed companies, not all listed firms.
Non-financial ESG disclosures are the core of BRSR; financials are supplementary.
CSR reporting is mandated under the Companies Act, separate from BRSR.
UPSC often tests regulator–framework mismatches (RBI vs SEBI vs MCA).

Table: Sustainability / Responsibility Reporting Frameworks in India

Framework / Report	Mandating Authority	Applicability	Nature of Disclosures	Purpose / Focus
BRSR (Business Responsibility & Sustainability Report)	SEBI	Top 1,000 listed companies (by market cap)	Largely non-financial (ESG)	Sustainability, responsible business conduct
BRR (Business Responsibility Report)	SEBI	Listed companies (earlier framework)	Non-financial	Predecessor to BRSR
Annual Financial Report	MCA / Companies Act	All companies	Financial	Financial performance
Integrated Reporting (<IR>)	Voluntary (global framework)	Voluntary in India	Financial + Non-financial	Value creation over time
CSR Reporting	MCA (Companies Act, 2013)	Companies meeting CSR thresholds	Financial + Activity-based	Social responsibility spending
Sustainability Report (GRI-based)	Voluntary	Any company	Non-financial	Global ESG benchmarking
Risk Management Disclosure	SEBI (LODR)	Listed companies	Financial + Non-financial	Governance and risk oversight

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