Govt brings out draft CSR rules

Govt brings out draft CSR rules

Companies funding NGOs under their CSR will have to check if the latter are at least three-years old.

Companies funding NGOs under their corporate social responsibilities (CSR) will have to check if the latter are at least three-years old.

Further,contributions made by corporates to the Prime Minister’s National Relief Fund or to other socio-economic development programmes of Central and state governments for the welfare of scheduled castes,scheduled tribes,other backward classes,minorities and women will now qualify under the CSR activity list.

These are some of the proposals that the corporate affairs ministry has made under the draft CSR rules of the Companies Act,2013 that was released on Monday.

The rules state that the CSR corpus would include 2 per cent of the average net profit,any income arising therefrom,and surplus arising out of CSR activities.


The rules further specify that funds can be utilised in areas such as eradication of hunger and poverty,education,reducing child mortality,environment sustainability,upgrading vocational skill and social entrepreneurship.

The draft provisions also state that corporates who undertake CSR activities through trusts or societies set up for the purpose would have to specify projects and establish a monitoring mechanism to ensure that funds are appropriately utilised.

There are,however,limitations on contributions to trusts not set up by the company,and would only qualify if the trust has an established track record of at least three years.

Parul Soni,executive director and leader – development advisory services,EY,said,“The expenditure on CSR should be viewed as a contribution for inclusive growth and nation building through the means of integrating the social development goals of the nation and of the goals of companies thereby achieving sustainable growth.”