New Delhi: Contributions made by corporates towards Swach Bharat Kosh and Clean Ganga Fund will be considered as social welfare spending under the new companies law, according to the government.
Swach Bharat Kosh and Clean Ganga Fund are among the key initiatives unveiled by the Narendra Modi-led government as part of its efforts to ensure cleanliness. While Swach Bharat Kosh is to attract funds for works to improve sanitation facilities, the Clean Ganga Fund is for pooling money to be used for cleaning up Ganga river.
Certain class of profitable companies are required to shell out at least two per cent of their three-year average annual net profit towards Corporate Social Responsibility (CSR) activities. The provision, which is part of the new Companies Act, came into force from April 1.
The Corporate Affairs Ministry, which is implementing the new companies law, has now brought contributions to Swach Bharat Kosh and Clean Ganga Fund under the CSR ambit. In a notification today, the Ministry has inserted the words 'including contribution to the Swach Bharat Kosh set up by the central government for the promotion of sanitation" in Schedule VII of the Act.
Besides, the words "including contribution to the Clean Ganga Fund set up by the central government for rejuvenation of river Ganga" have been inserted in the Schedule. Schedule VII of Companies Act, 2013, pertains to CSR activities. During the day, Modi -- whose government has embarked on a major drive to ensure cleanliness -- tweeted about the topic.
"Several friends told me that a lot of people cleaned the areas where they burst crackers during Diwali. I congratulate them for the efforts," he said in a tweet. Meanwhile, as per the new companies law, CSR norms would be applicable to companies having at least Rs 5 crore net profit, or Rs 1,000 crore turnover or Rs 500 crore net worth.
Such companies would need to spend two per cent of their three-year average annual net profit on CSR activities in each financial year, beginning 2014-15 fiscal. Livelihood enhancement and rural development projects, working towards protection of national heritage, setting up public libraries, promotion and development of traditional arts and handicrafts, are among the activities coming under CSR ambit.
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