Right to companies to choose areas for Corporate Social Responsibility (CSR)
Recently the Finance Minister has clarified that the government cannot dictate where the Corporate Social Responsibility (CSR) funds should be spent.
The Finance Minister has clarified that CSR companies have board-level decisions. This way companies are aware of local priorities and can make decisions based on them.
According to the Ministry of Corporate Affairs (MCA) data, in FY 2021, over 17,000 businesses spent around Rs 25,000 crore under CSR.
Also, 9,374 companies have spent more than the prescribed amount.
The increase in expenditure under CSR has been seen in the year 2021 due to amendments in the provisions related to CSR.
These amendments include the following:
Assessment of the impact of large CSR projects, more relaxation in utilization of CSR funds, etc.
Corporate Social Responsibility (CSR) –
- It is a commitment by businesses to incorporate social and environmental concerns into their business operations.
- Under this, companies fulfilling certain conditions have to spend 2% of their average net profit on CSR activities.
CSR expenditure has been made mandatory for the following companies:
Those having a net worth of Rs 500 crore or more during any financial year, or having a turnover of Rs 1,000 crore or more or having a net profit of Rs 5 crore or more during the preceding three consecutive financial years.
The government monitors the CSR compliance through the details given on the MCA-21 portal. Non-compliance of CSR rules is treated as a civil matter.
Special: There is no special exemption on taxes for CSR expenditure.
CSR Expenses:
- Swachh Bharat Kosh,
- Clean Ganga Fund,
- Prime Minister’s National Disaster Fund (PMNRF)
- PM Cares etc.
Other related headlines:
- The Ministry of Corporate Affairs has clarified that spending money for the ‘Har Ghar Tiranga Abhiyan’ will be treated as a CSR activity.
- The objective of the Har Ghar Tiranga Abhiyan is to encourage people to put up the tricolor at home and hoist it on the occasion of the 75th year of India’s independence.
Source – The Hindu
