2% CSR spend not mandatory for companies: Moily

The government today said it has not made it mandatory for companies to earmark 2% of profit for corporate social responsibility (CSR) activities.

"The government has not made it mandatory for the corporate sector to spend 2% of companies' net profit under CSR," Corporate Affairs Minister Veerappa Moily said in a written reply in Lok Sabha.

The Department of Public Enterprises has issued guidelines for central public sector enterprises in this regard, he added.

Under this, PSUs have to create mandatorily, through a board resolution, a CSR budget of a specified percentage of net profit of the previous year.

In the Companies Bill 2011, the government has proposed that companies should earmark two% of average profits of the preceding three years for CSR activities and make a disclosure to shareholders about the policy adopted in the process.