Millennium Post

Govt plans to make CSR acts mandatory

With an aim to improve corporate governance, the government approved various amendments to the Companies Act on Thursday, including mandatory earmarking of funds by companies for corporate social responsibility (CSR) spending.

As per the amendments approved by the cabinet on Thursday, the companies will also have to give preference to the local areas of their operation for such spending.

They will either have to implement mandatory CSR spending or 'cite reasons for non- implementation' or any short-fall.

Previously, the bill had called for the companies to 'make every endeavour to' spend two per cent of their three-year average profit towards CSR activities, thus making the matter voluntary for the companies.
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