CSR activities need to be project-based and time bound but the government does not want to invoke "inspector raj" for monitoring them, Corporate Affairs Minister Sachin Pilot said today.
The Minister expressed the hope that the new Companies Bill would be passed in the ongoing Parliament session. Under the amended legislation, companies are required to spend at least 2 per cent of their average profit for Corporate Social Responsibility activities.
"CSR activities need to be project-based and time bound ... The government does not want to invoke inspector raj," Pilot said at a function organised by industry body Ficci.
He said the government is not going to mandate companies on what needs to be done in terms of CSR activities.
CSR spending would become compulsory for companies that meet certain criteria, under the amended Companies Bill. Among others, firms having Rs 5 crore or more profits in the last three years have to spend on CSR activities.
In case, the companies are not able to do the same, they have to disclose reasons in their books. Otherwise, they would face action, including penalty.
The government in October had approved amendments to the Companies Bill 2011, including changes related to spending on CSR activities.