The Ministry of Corporate Affairs has modified the guidelines for determining how much it costs to perform social impact evaluations for corporate social responsibility (CSR) activities, and the process for handling the unused CSR funds of companies.
In the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2022, the ministry said that companies with any money in their “unspent corporate social responsibility account” shall establish a CSR committee to supervise the fulfilment of their CSR duties.
Companies may keep unused funds set aside for CSR purposes in this designated account, as long as they use them within three fiscal years, and its utilisation will be supervised by the CSR committee.
The government also changed how businesses figure out how much it will cost to undertake an impact assessment. Large CSR spenders are required by law to do an independent impact analysis of their operations. This enables businesses and investors to better target and analyse the social effect of their investments.
Additionally, this would aid them in developing stronger CSR initiatives. Businesses having a CSR budget of INR100 million (USD1.2 million) or more are required to do these impact assessments, as are any initiatives with an investment of INR10 million or more.
