EWS housing, rural development to qualify for CSR norms: Govt

Says slum re-development projects will also be covered under measures for reducing inequalities faced by socially and economically backward groups

Promising a liberal regime for the newly-implemented Corporate Social Responsibility law, the government has allowed the companies to include housing for Economically Weaker Sections (EWS) under their CSR programmes.

Besides, slum re-development projects will also be covered under "measures for reducing inequalities faced by socially and economically backward groups", which is a permitted CSR activity under the new rules.

Under the new Companies Act, which came into effect from April 1, 2014, certain class of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities.

CSR rules are applicable to companies having at least Rs 5 crore net profit, or Rs 1,000 crore turnover, or Rs 500 crore net worth.

In case these entities are unable to spend the required amount, reasons for the same have to be given to the Ministry.

Providing more clarity on social welfare spending norms for corporates, the Corporate Affairs Ministry has issued a seven-page circular containing clarifications on which all activities are permitted or not permitted for the new norms.

Works in the areas of disaster relief and setting up of trauma care around highways in case of road accidents would also be covered, while any project meant for development of rural India would be a permitted CSR activity.

The Ministry has said that the stakeholders must "liberally" interpret the CSR-related provisions of the new Companies Act.

The new circular has been issued after companies and other stakeholders requested specific items to be included in the list of permitted activities under the CSR norms.

Subsequently, activities undertaken for promotion of road safety such as awareness programmes, drivers' training, safety traffic engineering and awareness programmes through print, audio and visual media, as also social business projects for giving medical and legal aid and treatment to road accident victims would also be covered.

However, training to enforcement personnel in the area of road safety can not be covered as it is an established function of the government.

The government has also clarified that provisions for aids and appliances to the differently-abled persons would be included, as also the programmes relating to capacity building for farmers and training of agriculture labour on skill development.