Ficci and CII on Friday expressed hope that new rules would provide boards of companies flexibility in deciding 'Corporate Social Responsibility' activities.
Both groupings have welcomed the clarity around provisions related to CSR activities. The Corporate Affairs Ministry yesterday notified the rules for CSR activities. Under the new companies law, certain class of entities are required to shell out at least two per cent of their three-year annual average net profit towards social welfare spending.
The rules, to be effective from April 1, would be applicable to companies with at least Rs 5 crore net profit, or Rs 1,000 crore turnover or Rs 500 crore net worth. Ficci President Sidharth Birla said he expects that implementation of the CSR provisions "will allow boards all reasonable flexibility, as the underlying intent of the law is to promote self-regulation, non-intrusion and accountability".
The consultative process followed by the Ministry in finalising these rules helped in taking care of many, "but unfortunately not all of, industry concerns," he said in a statement. CII Director General Chandrajit Banerjee said the rules seek to limit the scope of CSR activities to those enshrined under Schedule VII of the Companies Act.