CPSUs will to spend up to 5% of net on CSR

The Central public sector units (CPSUs) will have to earmark up to 5 per cent of their net profit towards social sector projects, according to the comprehensive CSR guidelines issued by the Department of Public Enterprises.

"The new guidelines lay stress on the link of corporate social responsibility (CSR) with sustainable development... wherein organisations serve the interest of the society by taking responsibility for the impact of their activities on customers, employees, shareholders, communities and the environment in all aspects of their operations," an official statement said.

"CPSUs have to create mandatorily, through a board resolution, a CSR budget as a specified percentage of net profit of the previous year," it said, adding the CSR budget has to be fixed for each financial year such fund will be non-lapsable.

For CPSUs having under Rs 100 crore profit, the CSR budget in a financial year would be 3-5 per cent of the profit of the previous year, the statement said, adding it would be 2-3 per cent (subject to minimum of Rs 3 crore) for those in the range of Rs 100 crore-Rs 500 crore profit and 0.5-2 per cent for those with net profit of over Rs 500 crore, it said.

The loss-making enterprises are not mandated to earmark specific funding for CSR activities but may achieve this by integrating business processes with social processes, wherever possible, the statement said.

There are 246 undertakings under the Central government today. The boards of these PSUs would be responsible for CSR implementation which would be a part of the annual memorandum of understanding signed between CPSUs and government, the statement said.

It further said these units are required to move from "an ad-hoc approach" to the project mode with specified frames and periodic milestones. The activities under CSR should also be in consonance and consultation with the Centre and states and local administration to avoid duplication.

The Department of Public Enterprises, in association with the apex CPSU body SCOPE, and CPSUs will also create a national CSR hub to undertake\facilitate social sector activities like research and creation of a data base and promotional activities.