NEW DELHI: Emphasising the need to have more checks and balances on corporate social responsibility (CSR) spends incurred by state-owned companies, PSUs apex body SCOPE on Tuesday said there is a need to have social audits of such activities.
“Such kind of checks are important so that the CSR fund is not diverted to those who do not have credential or credibility up to the mark, Standing Conference of Public Enterprises (SCOPE) Executive Director U D Choubey said here.
Last year, the government had made it mandatory for Central Public Sector Enterprises (CPSEs) to earmark up to 5 per cent of their net profit for social sector projects, under the CSR.
Under these guidelines, PSUs with net profits of up to Rs 100 crore would contribute 3-5 per cent.
Those earning net profits of Rs 100-Rs 500 crore would contribute 2-3 per cent of the amount subject to a minimum of Rs 3 crore, while those with a net profit of Rs 500 crore and above would contribute 0.5-2 per cent.
These obligations are set in the Memorandum of Understanding (MoU), which sets targets for an individual state-owned company. The performance evaluation of PSUs also have CSR as one of the parameters.
Further, Choubey said that there is a need to make CSR spends mandatory for private companies as well to provide a level playing field to the PSUs.
The Corporate Affairs Ministry is favouring CSR spends of 2 per cent of net profits of private firms in the new Companies Bill.
Of the total 249 CPSEs, 217 are operational.