CSR rules now allow firms to take up multi-year projects

New Delhi, Jan. 22: The government on Friday amended various rules pertaining to the CSR regime, including allowing corporates to undertake multi-year projects and making registration compulsory for agencies implementing CSR activities on companies’ behalf.

Besides, companies have been permitted to set off the excess amount spent under CSR up to three succeeding financial years. They have also been allowed to create or acquire capital assets through CSR in the name of beneficiaries or a public authority or registered trust, among others.

Non-compliance with CSR provisions has been decriminalised by shifting such offences to penalty regime, while companies having CSR obligation below Rs 50 lakhs have been exempted from constituting a CSR Committee, according to the corporate affairs ministry.

Under the Companies Act, 2013—being implemented by the corporate affairs ministry—certain class of profitable companies are required to shell out at least two per cent of their three-year annual net profit towards corporate social responsibility (CSR) activities in a financial year.

The amendments are aimed at further improving the ease of doing business, decriminalising non-compliance with CSR provisions as well as to make the CSR framework more transparent, an official told PTI.

Further, the idea is to move from just looking at expenditure to focusing on impact of CSR projects implemented under the companies law, the official added.

In a significant move to boost transparency, agencies implementing CSR projects for companies should get registered with the ministry's MCA 21 portal and the system will automatically generate a unique CSR registration number.

The registration requirement will be effective from April 1, 2021.

Also, international organisations have been permitted to carry out designing, monitoring and evaluation of the CSR projects or programmes. However, they cannot act as implementing agencies.

According to the official, such a move will help in bringing in the best international practices in the field of CSR and capacity building.