Centre revises CSR rules
1 min read 22 Sep 2022, 04:03 PM ISTCompanies are allowed to keep unspent amounts earmarked for CSR in a designated account but have to utilise it within three financial years. The CSR committee will oversee its utilisation.
PremiumNEW DELHI: The ministry of corporate affairs has amended the rules for calculating the cost of conducting social impact assessments of corporate social responsibility (CSR) activities and the procedure for dealing with unspent CSR funds of companies, showed an official order.
The ministry of corporate affairs said in the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022, businesses having any amount in its ‘unspent corporate social responsibility account’ should set up a CSR committee to oversee the implementation of its CSR obligations. Companies are allowed to keep unspent amounts earmarked for CSR in this designated account but have to utilise it within three financial years. The CSR committee will oversee its utilisation.
The ministry also modified the way companies can calculate the expenditure towards conducting an impact assessment. The law requires large CSR spenders to carry out an independent impact assessment of their activities. This allows companies and investors to understand the impact of their social investments and target it better. This would also help them in framing better CSR programmes. Such impact assessment is mandatory for businesses with RS 10 crore or more CSR budget and for all projects with an outlay of ₹1 crore or more.
The new rule says that the expenditure for social impact assessment, which can be included in the CSR spending, shall not exceed 2.5% of total CSR expenditure for the relevant financial year or ₹50 lakh whichever is higher. The earlier rule had allowed up to 5% of the total CSR spending or ₹50 lakh whichever is less. The change allows higher spending on impact assessment in case of large CSR projects.
