CSR spends to be made mandatory for India Inc: Sources

Excerpts from Reporter's Diary on CNBC-TV18 Watch the full show »

Corporate social responsibility (CSR) spends will now be made mandatory for corporate India, sources in the Ministry of Company Affairs told CNBC-TV18's Siddharth Zarabi. If approved, companies will have to spend 2% of the average net profit on CSR.

Mandatory CSR will be made part of the amendment to the Companies Bill. Currently, CSR 2009 guidelines are voluntary.

CSR will be mandatory for companies with Rs 500 crore networth, Rs 1,000 crore sales, or net profit of Rs 5 crore or more.

Such companies will have to formulate a CSR policy. Directors will have to disclose CSR in their annual report.

Exemption will be made for companies not making 'adequate profits' or those that are not in a position to spend money.

The Ministry of Company Affairs agrees with MPs' suggestions on CSR. Even a Parliament Standard Committee had suggested a specific CSR policy.