National body to monitor CSR funds, project execution likely
An independent mechanism may be put in place to ensure fair, transparent and full use of the funds earmarked by India Inc for corporate social responsibility (CSR) activities. New corporate affairs minister Sachin Pilot has proposed creation of an entity — likely a special purpose vehicle (SPV) — for monitoring CSR funds use besides ensuring that corporates don’t fail in timely execution of CSR projects. Speaking to FE, the minister said the proposed body would be independent of government intervention and run by corporates/industry bodies, with a wide representation to ensure its neutrality. Pilot has invited industry bodies like the Confederation of Indian Industry, Federation of Indian Chambers of Commerce and Industry and top corporate executives to discuss the matter on December 4.
The Companies Bill, 2011, slated for consideration and passing by Parliament in the current session, makes it mandatory for profitable government and private companies to allocate 2% of their average profits accrued in the preceding three financial years on CSR programmes. According to estimates, the annual CSR funds corpus could be around R10,000 crore (around $2 billion) or more.
As per the ministry’ plan, there would also be a national-level CSR body to monitor the activities of the proposed SPV/financial entity. Its mandate will be to ensure that the funds earmarked for CSR projects are fully used up on the designated activities.
Sources said the proposed SPV/financial entity would have legal status and won’t aim to make profits.
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