Indian companies will have to hand over the unspent money in the social responsibility fund to the government
- The Companies Amendment Bill was approved by the Cabinet, said that any amount left unspent should be transferred to a special account called the ‘Unspent Corporate Social Responsibility Account’.
- Government will be taking over the money they are asked to spend, and transferred to its own fund.
- Indian companies are known to spend as much as ₹15,000 crore annually on corporate social responsibility.
It is common for most companies to miss out on fulfilling the government mandate to spend a certain amount of funds on social activities. And, soon government will be taking over the money they are asked to spend, and transfer to its own fund, as per the amendments to the
Most companies, including publicly listed companies take the 2013 mandate of the government casually. As per the norm, companies with a net profit of over ₹5 crore or revenues of ₹1,000 crore or net worth of ₹500 crore; should spend 2% on their profits on corporate social responsibility (CSR).
Six years on, few companies take it seriously though most top companies like Reliance Industries, L&T and all public sector companies do take the efforts to ensure money flows to the right causes. Those who spend regularly tend to focus on education, rural development and healthcare.
The Companies Bill amendments say that any amount left unspent should be transferred to a special account called the ‘Unspent Corporate Social Responsibility Account’. “Such amount shall be spent by the company in pursuance of its Corporate Social Responsibility Policy within a period of three financial years from the date of such transfer,” the draft amendment said.
Indian companies are known to spend as much as ₹15,000 crore annually on corporate social responsibility.
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