The Department of Public Enterprises has recently issued comprehensive “Guidelines on Corporate Social Responsibility for Central Public Sector Enterprises”.
Under these guidelines, CPSEs have to create mandatorily, through a Board Resolution, a CSR budget as a specified percentage of net profit of the previous year. Expenditure range for CSR in a financial year is 3-5% of the net profit, of previous year, in case of CPSEs having profit less than Rs. 100 crore; 2-3% (subject to minimum of 3 crores) in case the profit ranges from 100 crore to 500 crore and 0.5-2.0% in case of CPSEs having a net profit of more than Rs. 500 crore in the previous year.
Loss making companies are not mandated to earmark specific funding for CSR activities but may achieve this objective by integrating business processes with social processes, wherever possible. The CSR budget has to be fixed for each financial year and the funds would be non-lapsable.
The new guidelines lay stress on the link of Corporate Social Responsibility with sustainable development and define Corporate Social Responsibility (CSR) as a philosophy wherein organizations serve the interest of society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations.
Under these guidelines, the long-term CSR Plan is to match with the long-term Business Plan of the Organization. The activities under CSR are to be selected in such a manner that the benefits reach the smallest unit, i.e., village, panchayat, block or district, depending upon the operations and resource capability of the company.
Under these guidelines, the Corporations are required to move from an ad-hoc approach to the project mode with specified time frames and periodic milestones. The activities undertaken under CSR should also be in consonance and consultation with State Governments, district administration, local administration as well as Central Government departments/agencies, Self-Help Groups, etc;, to avoid duplication.
Under these guidelines, special stress has been laid on the proper monitoring of the CSR projects undertaken. The Boards of the CPSEs would be responsible for the implementation of the CSR activity which would then be a part of the annual MoU signed between CPSEs and the Government. Also, there is a provision for appointment of Social Audit Committee and independent external agency for periodic monitoring as well as evaluation.
The Department of Public Enterprises in association with SCOPE and the CPSEs will create a National CSR Hub to undertake/facilitate many activities relating to CSR, such as research and creation of a data base; advocacy; promotional activities; conferences/ seminars/ workshops, etc.
Source: Press Information Bureau (PIB).
