Central PSUs will soon have to earmark up to 5 per cent of their net profit for social sector projects with the government proposing to issue corporate social responsibility guidelines for the State-owned firms.

The Department of Public Enterprises has prepared guidelines for the central public sector enterprises (CPSEs) to take up important corporate social responsibility (CSR) projects.

“We are having a discussion with Heavy Industries and Public Enterprises Minister Vilasrao Deshmukh for finalising the CSR guidelines. It is expected to be finalised within a month,” Department of Public Enterprises (DPE) secretary Bhaskar Chatterjee told PTI.

The proposal, which was recently cleared by the Committee of Secretaries, will make it mandatory for CPSEs with net profits of up to Rs 100 crore to contribute 3-5 per cent, he said.

Those earning net profits of Rs 100-Rs 500 crore would contribute 2-3 per cent of the amount subject to a minimum of Rs 3 crore, while those with a net profit of Rs 500 crore and above would contribute 0.5-2 per cent.

The CSR would no more be confined to organising blood donation camps or some charity event. The CPSEs would be obliged to take up specific projects to help people affected directly or indirectly by their businesses.

“There is no escaping from CSR, which will no longer be a photo opportunity for the chairman,” Mr. Chatterjee said.

While several CPSEs provide funds for CSR projects, it is currently not obligatory in nature.

These obligations would be set in the Memorandum of Understanding (MoU), which sets targets for an individual CPSE. The performance evaluation of PSUs would also have CSR as one of the parameters.

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