Government makes Corporate Social Responsibility spending mandatory for public sector companies

NEW DELHI: Coming out with revised guidelines, the government has made it mandatory for all profit-making central public sector companies to spend money on CSR activities. 

Besides, these enterprises cannot include money spent on sustainable development efforts under the Corporate Social Responsibility (CSR) ambit.

The Department of Public Enterprises (DPE) has come out with the revised guidelines following the new Companies Act making social welfare spending compulsory for certain class of profitable corporates mandatory. 

In comparison with provisions under the Companies Act, 2013, the latest DPE norms are more strict since it would be applicable on all profit-making central public sector enterprises. 

As per the companies law, certain class of entities are required to shell out at least two per cent of their three- year annual average net profit towards CSR activities. This would be applicable to companies having at least Rs 5 crore net profit, or Rs 1,000 crore turnover or Rs 500 crore net worth.

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