Replacing the nearly six-decade old regulations for corporates, the new Companies Act makes it mandatory for certain class of profitable enterprises to spend money on social welfare activities and such expenses are estimated to total about Rs 15,000-20,000 crore a year.
The rule-making process for Companies Act, 2013, saw extensive public consultations and the exercise is now nearing completion, while CSR regulations would be among the first to get a detailed set of rules.
According to him, the rules are exhaustive and efforts have been made to include as much as possible, including health care and environment. Besides, a provision has been made under which any activity deemed as CSR by the board of the concerned company would qualify for the same, provided a disclosure is made about that for the benefit of shareholders.
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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.
In case the firms are unable to spend the money, they have to provide reasons and disclose the same.
When asked what would happen if companies fail to make necessary disclosures on CSR, Pilot said then it is a "serious offence".
Asserting that any activity should be approved by the company's CSR committee and the board, Pilot said the government only wants "full disclosure".
Pilot has always maintained that the government would not want to be the judge and jury on how to spend the CSR money.
In response to a query on whether creating electoral awareness would be considered as CSR, the Minister said if a company is interested in doing so they can do it but with the approval of its board.