Expanding the ambit, works carried out by corporates for slum area development will be now considered as social welfare spending activity under the new companies law. Under the Companies Act, 2013, certain class of profitable companies are required to shell out at least 2 per cent of three-year annual average net profit towards Corporate Social Responsibility (CSR) activities.
Through a recent notification, the Corporate Affairs Ministry has added 'slum area development' to the list of activities that would classify as CSR under the Act.
In this regard, the ministry has amended Schedule VII —pertaining to CSR works — in the Companies Act, 2013. ‘The term 'slum area' shall mean any area declared as such by the central government or any state government or any other competent authority under any law for the time being in force,’ it said in a notification dated 6 August.
In June, the ministry had said slum re-development projects and housing for economically weaker sections (EWS), among others, would be covered under CSR.
Among others, works in the areas of disaster relief and setting up of trauma care around highways in case of road accidents would also be covered.