Govt to Notify New CSR Rules

The Central Government notified new rules for Corporate Social Responsibility (CSR) under the new companies’ law, which directs the companies having net worth of at least 500 crore or minimum turnover of 1000 crore or net profit of 5 crore to give 2% of the average profit of previous three years on all the CSR activities which will not include any of the political funding and only those activities will be considered for CSR expenditure which take place in only India. The companies which are unable to spend are supposed to give reasons for falling short.

The new rules of CSR will include all the programmes and activities undertaken by board of directors, provided such new rule/policy will cover all new amended provisions mentioned in schedule VII of the Companies Act.

Eradicating hunger, poverty and malnutrition, promoting preventive healthcare and sanitation and the Prime Minister Relief’s Fund with measures for the benefit of armed forces veterans, war widows and their dependents, homes and hostels for women and orphans, old age homes, day care centres and other facilities for senior citizens are the areas defined under CSR policy.

The new CSR policy is different from conventional policy statements. The company board will have to work within framework of CSR Rules; the option of choosing a new area outside the broad guidelines will be refrained.

The new CSR rules will be applicable from 1st April, 2014.

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