An appropriate mechanism is being developed for public sector companies to report about their Corporate Social Responsibility (CSR) activities, the government said on Monday.

The move comes at a time when the new legislation on companies require private firms to spend at least 2 per cent of three-year average annual profit towards CSR work.

“The implementation of CSR guidelines is also monitored by the administrative Ministry/Department concerned with CPSEs. An appropriate mechanism is being developed for reporting,” Corporate Affairs Minister Sachin Pilot told the Rajya Sabha.

In a written reply, he also said that the Department of Public Enterprises (DPE) is not “centrally maintaining the data on CSR spending” by Central Public Sector Companies.

At present, the performance of public sector undertakings with regard to CSR activities and sustainability is evaluated by the DPE through Memorandum of Understanding with the entity concerned.

For implementation of CSR activities, guidelines require public sector companies to have a two-tier structure. One is to have a board level panel headed by either the chairman and/or managing director or an independent director. Besides, there has to be a group of officers headed by a senior executive not less than one rank below the board level.

With regard to public sector companies, the CSR spending limits are different compared to private entities.

State-run firms, having less than Rs 100 crore Profit After Tax (PAT), are required to shell out 3 to 5 per cent of that amount towards CSR and sustainability activities. In the case of companies having PAT of Rs 100 to 500 crore, the limit is 2 to 3 per cent.

For entities having PAT of Rs 500 crore and above, the spending level is fixed at 1 to 2 per cent.

Meanwhile, the CSR norms would be applicable for private companies having either net worth of Rs 500 crore or more; turnover of Rs 1,000 crore or more; or net profit of Rs 5 crore or more.

In another written reply, the Corporate Affairs Minister said that companies “will have latitude in designing project based CSR interventions within the framework of Schedule VII of the Bill and the CSR policy of the company“.

According to him, the draft rules, including reporting requirements, would be prepared in consultation with all stakeholders.