Press Information Bureau

Government of India

Ministry of Corporate Affairs

21-May-2012 16:58 IST

Monitoring of CSR Activities

The Government has taken various steps to encourage adoption of Corporate Social Responsibility (CSR) activities by the companies, such as;

(i) The Department of Public Enterprises has issued guidelines for Central Public Sector Enterprises (except those making losses) to mandatorily create a CSR budget.

(ii) In July, 2011, National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business were released for guidance of companies in general.

(iii) The Companies Bill, 2011 proposes that companies, depending upon their networth, turnover and net profit, shall endeavour to spend in every financial year, atleast 2% of the average net profit made during the three immediately preceding financial years, towards a range of activities including welfare of SCs, STs, OBCs, minorities and women, in pursuance of its CSR policy.

This information was given by the Minister of State in the Ministry of Corporate Affairs Shri R.P.N. Singh in the Rajya Sabha today in reply to a written question whether Government proposes to make it mandatory for companies to spend income on CSR and the steps taken by Government to ensure that the Corporate Social Responsibility (CSR) is followed by companies for promotion of economic development of the country especially by assisting the disadvantageous sections.

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Corporate Social Responsibility obligations proposed, with guidance and mandated budgets to encourage company spending and monitoring compliance. Government action combines directive and legislative proposals: the Department of Public Enterprises requires Central Public Sector Enterprises (excluding loss-making units) to create CSR budgets; National Voluntary Guidelines provide guidance to companies; and the Companies Bill, 2011 proposes that companies meeting financial thresholds should endeavour to spend a fixed proportion of average net profits over the preceding three years on specified CSR activities, including welfare of disadvantaged social groups.