NEW DELHI: According to the new Companies Bill 2012, companies with a net worth of Rs.500 crore or more, a turnover of Rs.1,000 crore or more or a net profit of Rs.5 crore or more in a financial year are mandated to pay 2% of their profit towards CSR.
Corporate Affairs Minister Sachin Pilot on Friday said religions contributions by corporates should not be considered as corporate social responsibility (CSR) activity.
“Religious contributions by corporates should not be considered as CSR. For a corporate entity to do religious donations… I don’t think it constitute a part of CSR,” he told reporters on the sidelines of an interactive session with industry honchos organised by the Confederation of Indian Industry.
According to the new Companies Bill 2012, companies with a net worth of Rs.500 crore or more, a turnover of Rs.1,000 crore or more or a net profit of Rs.5 crore or more in a financial year are mandated to pay 2% of their profit towards CSR.
This provision has led to considerable discussion in the corporate sector regarding its pros and cons.
“Certainly, we will make some broad guidelines about what are the things which will be considered as CSR, but it is upto the companies to decide. The boards of the companies have to give approvals to these and it should be put up on the website of the companies for public view,” Pilot said.
While interacting with the industry members earlier, he said out of a total 800,000 companies in the country, around 15,000 companies in India will qualify for CSR activities.
“With CSR being made mandatory, we do not want corporates to spend money on it grudgingly. We want the companies to come forward to contribute in nation-building. It is not about the quantum of money, it is about being part of the social and economic development of the country,” he added.
Pilot said the CSR activities of the companies should be approved by their respective boards. “This will be as open-ended as possible.”
The industry leaders who attended the interactive session were Adi Godrej, chairman, Godrej Group; Kris Gopalakrishnan, executive vice-chairman, Infosys; Kiran Mazumdar Shaw, chairman and managing director, Biocon Limited; Rahul Bajaj of Bajaj Electricals; and Rajive Kaul, chairman, Nicco Corporation, among others.
Regarding the ongoing Tata-Unitech issue, where the Serious Fraud Investigation Office has questioned the purpose of the Rs.1,700 crore deal in 2007 between the Tata Group and Unitech, Pilot said the report will come out in the next few days.