CSR rules soon; to be exhaustive, flexible: Pilot
Jan 07 2014 , New Delhi
The new Corporate Social Responsibility rules will be notified in a "few days", he said.
The new Companies Act requires certain class of entities to spend at least 2 per cent of their 3-year average annual net profits towards CSR activities.
Pilot, who is steering the implementation of the new legislation, said: "It (CSR rules notification) will be out soon... We have finally tried to accommodate as many requests that came our way.
"Now we are having the Law Ministry vet those rules for any legality that may be missing or needs to be added. In a few days time as soon as we get the go-ahead from the Law Ministry in the formulation of the rules, we will notify them."
When asked about the changes that are being made in CSR norms compared to the draft stage, Pilot said they would be very flexible and very exhaustive.
According to him, not only rules but Schedule VII of the Companies Act pertaining to CSR activities has also been modified. In the new companies law, CSR is in Section 135 under Schedule VII.
"We have also redrafted the schedule because of the kind of ideas we got. We felt that if we have made a certain set of schedule that needs to be expanded or amended there is no harm in it," Pilot said on the sidelines of the Pravasi Bharatiya Divas event here.
"The kind of ideas we got from NGOs, corporate sector, from all stakeholders, I think they were quite ingenious and we thought we should incorporate them right in the beginning itself. We have done our best to make it as expanded as possible and yet leaving the freedom and choice to do the work in CSR to the board and companies themselves," he added.
Going by estimates, the total spending on CSR activities is estimated to be around Rs 15-20,000 crore annually.
Under the Companies Act, 2013, firms having a net worth of at least Rs 500 crore or a minimum turnover of Rs 1,000 crore or a net profit of Rs 5 crore are required to spend on the CSR activity.
The Minister emphasised that the new Companies Act is all about self-reporting and disclosures. "We have tried to put the global best practices... So all financial transactions which need to be disclosed have to be disclosed that is the emphasis of the Act," he noted.