Under the Companies Act, 2013 -- being implemented by the corporate affairs ministry -- certain class of profitable companies are required to shell out at least two per cent of their three-year annual net profit towards CSR (corporate social responsibility) activities in a financial year.
The amendments are aimed at further improving the ease of doing business, decriminalising non-compliance with CSR provisions as well as to make the CSR framework more transparent, an official told PTI.
Further, the idea is to move from just looking at expenditure to focusing on impact of CSR projects implemented under the companies law, the official added.
In a significant move to boost transparency, agencies implementing CSR projects for companies should get registered with the ministry's MCA 21 portal and the system will automatically generate a unique CSR registration number.
The registration requirement will be effective from April 1, 2021.
Also, international organisations have been permitted to carry out designing, monitoring and evaluation of the CSR projects or programmes. However, they cannot act as implementing agencies.
According to the official, such a move will help in bringing in the best international practices in the field of CSR and capacity building.
Besides, disclosure requirements have been enhanced with respect to CSR projects.
As per the amended rules, there will be impact assessment of CSR projects that will help companies to plan and allocate resources in a better manner. The assessment will be applicable subject to various conditions.
The CSR provisions came into force from April 1, 2014. The CSR expenditure has increased from Rs 10,066 crore in FY 2014-15 to Rs 18,655 crore in 2018-19 and a cumulative total of Rs 79,000 crore has been spent throughout the country, according to data available with the ministry.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
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