India Inc wants activities like public awareness ads, gainfully employing skilled professionals to be included under CSR.
NEW DELHI: Financial Express reported that India Inc wants activities including public awareness advertisements, gainfully employing skilled professionals, and contribution to local governing bodies for public causes to be included under corporate social responsibility (CSR), as defined under the Companies Act, 2013.
Apart from the expansion of the list of activities, corporates also want provision for carrying forward the unspent money set aside for CSR, a government official told The Indian Express.
The suggestions are a part of the comments received by the corporate affairs ministry on the rules for CSR under the recently-passed Companies Act, 2013. The Bill was passed by the Rajya Sabha and received President Pranab Mukherjee’s assent in August.
According to the Act, companies should ensure an expenditure of two per cent of the average profit of the preceding three years on CSR activities, failing which, they will have to disclose reasons in their annual report.
According to the proposed rules, activities relating to eradicating extreme hunger and poverty; promotion of education, gender equality and empowerment of women; reducing child mortality and improving maternal health; combating HIV-AIDS, malaria and other diseases; ensuring environmental sustainability, employment enhancing vocational skills; and contribution to the Prime Minister’s National Relief Fund or any other Central or state fund would be considered as CSR activity under the Act.
“Corporate bodies have suggested that the ministry should allow contribution to municipal corporation for public cause, like combating dengue, to be considered as CSR. Another suggestion is that in cases where corporates are funding non-governmental organisations and company employees also benefit from it, it should be called CSR activity,” the official said.
The ministry officials along with officials of Indian Institute of Corporate Affairs would meet in the second week of this month to finalise the rules. In total, the ministry has received around 27,000 comments for rules for all the Sections of the Act, with around 2,000 comments for CSR alone.
Companies have also sought clarity on whether the Section 25 companies or charitable organisations set up by them would be included towards CSR. The major area of concern, however, among all corporates, is taxation.
“Around 60-70 per cent suggestions, queries and comments received are on taxation. First, they want CSR to be considered as expenditure in profit and loss account. The other suggestion is a tax holiday on such activities,” the official said. While some of these recommendations like carrying forward unspent money are being considered by the ministry, those like providing suitable employment to underemployed skilled professionals like doctors, chartered accountants and engineers may not, the official added.
List of activities
* Inclusion of public awareness campaigns
* Gainfully employing skilled professionals
* Section 25 companies
* Contribution to local governing bodies for public causes
* Provision of carrying forward unspent amount
(Financial Express, 5 November 2013)