NEW DELHI: The government is likely to prepare a blue print to coordinate the corporate social responsibility (CSR) activities of the state-owned companies in the backdrop of the proposal to make it mandatory for firms to invest at least 2% of the profit on such initiatives.
The Department of Public Enterprises Secretary Bhaskar Chatterjee has asked the apex PSUs body – Standing Conference of Public Enterprises (SCOPE) – to make a report about works of state-run firms on CSR in the agriculture sector.
“We need to chalk out a blue print as to how we can coordinate the [CSR activities of] public sector enterprises …What SCOPE needs to do is to prepare some kind of a position paper on what the entire public sector units are doing in agriculture sector,” Chatterjee said in a function.
He said that the paper would help in making a coordinated platform as “how we can come together to do it (CSR) better”.
The suggestion for earmarking a part of a company’s profit for CSR was floated by the Parliamentary Standing Committee on Finance, which scrutinised the Companies Bill, 2009.
Subsequently, the Ministry of Corporate Affairs (MCA) proposed that every company having (net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more) or (a net profit of Rs 5 crore or more during a year) shall be required to formulate a CSR Policy.
However, industry is opposing this provision as according to them they should be allowed to monitor implementation of CSR themselves without the government intervention.
At present, spending on CSR activities is part of the voluntary guidelines laid out by the MCA and it draws no penal provisions.
However in case of PSUs, those government companies whose net profit is less than Rs 100 crore have to contribute 3% of their income for CSR, PSUs with profits between Rs 100-500 crore would be required to earmark 2-3%.
Further, those companies earning a profit of Rs 500 crore and above, CSR spending should be between 0.5% and 2% of the net profit.
“Lets prepare this position paper…We can then prepare a coordinated strategy for CSR,” he added.
(Press Trust of India)