New Delhi: Setting up of hostels for women and orphans as well as efforts that benefit armed forces veterans, war widows and their dependents will come under the `Corporate Social Responsibility` spending ambit.
With the government notifying norms for CSR spending by companies, Corporate Affairs Minister Sachin Pilot on Thursday said the rules have been finalised after extensive discussions with all stakeholders.
The new CSR regime, part of the Companies Act 2013, requires certain class of corporates to shell out at least two per cent of their three-year annual average net profit towards social welfare spending activities.
Besides setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens would be considered as CSR activities by the government.
Significantly, "measures for reducing inequalities faced by socially and economically backward groups," would also come under CSR ambit.
Further, measures initiated by companies for the benefit of armed forces veterans, war widows and their dependents would be classified as social welfare spending by companies.
Both domestic and foreign companies having net worth of at least Rs 500 crore or having minimum turnover of Rs 1,000 crore or those with at least net profit of Rs 5 crore, have to make CSR spend.
Another area included in the CSR framework is promoting preventive health care and sanitation and making available safe drinking water.
Commenting on CSR rules, Pilot further said they "provide for the manner in which CSR Committee shall formulate and monitor the CSR Policy, manner of undertaking CSR activities, role of the Board of directors therein and format of disclosure of such activities in the board`s report".
As per the notified rules, ensuring ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water can also be CSR initiatives.
In addition, livelihood enhancement and rural development projects would be under CSR framework.
Other areas covered include protection of national heritage, art and culture, setting up public libraries, promotion and development of traditional arts and handicrafts, training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports.
"Contributions or funds provided to technology incubators located within academic institutions which are approved by the central government," would also be considered as CSR activities, according to the rules.
