Government makes social spending mandatory for central units

From now on central public sector undertakings (CPSUs) have to mandatorily allocate a specified percentage of their annual net profits for meeting corporate social responsibility (CSR).

The department of public enterprises has issued comprehensive guidelines on corporate social responsibility for central public sector enterprises (CPSEs), an official release said today.

Under the guidelines, CPSEs have to create mandatorily, through a board resolution, a CSR budget as a specified percentage of net profit of the previous year.

The expenditure range for CSR in a financial year is 3-5 per cent of the net profit, of previous year, in case of CPSEs having profit less than Rs100 crore; 2-3 per cent (subject to minimum of Rs3 crore) in case the profit ranges from Rs100 crore to Rs500 crore and 0.5-2 per cent in case of CPSEs having a net profit of more than Rs500 crore in the previous year.

While loss making companies are exempt from earmarking specific amounts for CSR activities, they will have to achieve this objective by integrating business processes with social processes, wherever possible.

The CSR budget has to be fixed for each financial year and the funds would be non-lapsable.