industry that the government would not get into auditing companies books to check CSR spends and the companies would be free to make self-declarations.
However, Pilot made it clear that India Inc will have to mandatorily spend 2% of their annual profits on measurable social activities as part of their CSR initiatives. Pilot said the government wants to be seen as an enabler and not the driver of CSR initiatives. The minister said that India Inc was happy to contribute towards CSR activities. I heard their suggestions and plans on CSR. I will strive to address their concerns, if any, on implementation of CSR initiatives. This has to be done on a voluntary basis by the corporates themselves, Pilot said.
He said the ministry was working out the rules and penalties for those companies which do not create a CSR fund or do not spend their CSR funds or fail to report their CSR activities to their shareholders and the regulator.
The corporate affairs ministry will soon work out and put up a standard performa on its website. This can be used by the companies to furnish the details of their CSR activities, funds allocated and used, etc. We will encourage India Inc to do this on a voluntary basis. But there will be penalties for those who dont. We are in the process of drafting the rules, Pilot said on the sidelines of a day-long meeting with the corporate sector on CSR activities.
On tax breaks sought by the industry, Pilot said: Let me go back to my ministry and discuss it. I will also talk to the finance ministry about this. But first, we need to discuss it internally.
Speaking about the CSR funds generated by the public sector enterprises, Pilot said the unspent amount of the CSR fund will need to be transferred to a non-transferable pool which will be maintained by the individual PSU. He said a National Foundation of Corporate Social Responsibility (NFCSR) has been set up within the Indian Institute of Corporate Affairs for which the government has provided an initial corpus of Rs 1.5 crore. NFCSR is likely to receive similar endowments from many non-governmental sources in the near future, he said.