The Central Public Sector Enterprises as part of their Corporate Social Responsibility (CSR) will have to give priority to safe drinking water for all, provision of toilets particularly for girls, health and sanitation, among others.

The Ministry for Heavy Industries and Public Enterprises has issued fresh guidelines on CSR and sustainability for CPSEs based on the New Companies Act. These companies have now been allowed to take up CSR activities anywhere in the country.

However, the guidelines are stricter than those given in the Companies Act regarding provisions related with spending norms. The Ministry’s guidelines say that if a company fails to spend the prescribed amount, the Board will report and specify the reasons for failing to do so. It further states that the unspent CSR amount in a particular year would not lapse, “It would instead be carried forward to the next year for utilisation for the purpose for which it was allocated.”

On August 15, the Prime Minister Narendra Modi had said that all schools in the country should have toilets with separate provisions for girls.

Following Modi’s announcement, the Ministry has said that a CPSE will now be able to spend money on setting up toilets for girls as part of its CSR.

The Companies Act prescribes that every company with a net worth of ₹500 crore or more, or turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more, during any financial year, will be required to spend 2 per cent of average net profit for the immediate three preceding financial years on CSR. The CSR guidelines stipulate that a CPSE after giving due preference to the local area may also undertake CSR activities anywhere in the country.

“The Board of Director of each CPSE may also decide on an interactive ratio of CSR spend between the local area and outside it, and this may be mentioned in the CSR policy of the CPSE,” it said.

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