Govt bats for mandatory 2% CSR, industry not in favour
The government is in favour of making it mandatory for Indian companies to spend 2% of their profits on corporate social responsibility (CSR).business Updated: Feb 17, 2011 21:33 IST
The government is in favour of making it mandatory for Indian companies to spend 2% of their profits on corporate social responsibility (CSR).
The industry, however, is not in favour of the government intervention on the issue, which was discussed in a meeting attended by Murli Deora, corporate affairs minister, RPN Singh, minister of state, industry bodies and representatives.
“My personal view is that it should be made mandatory,” said Deora.
“We are trying to get everyone on board for making 2% on CSR mandatory,” said Singh.
The public sector enterprises are required to spend 5% of their net profit on CSR. The government is keen to make it mandatory for the private sector to spend on CSR.
PSUs with net profit less than R100 crore are mandated to contribute 3-5% of their bottomline for CSR, while those with profits between R100-500 crore direct 2-3% on the same.
“Everybody agreed that there should be CSR, the only point is that there should be no government intrusion in that mechanism,” Deora said.
The parliamentary standing committee on finance, which vetted the Companies Bill, 2009, has said that companies would be required have to spend 2% of their average net profits during on CSR. The bill may be brought up in Parliament in the forthcoming budget session for approval.