Ministry of Corporate Affairs has written to the Chattisgarh government on the state's proposed CSR policy which reportedly asks certain companies to contribute funds to a Chief Minister Community Development Fund as part of Corporate Social Responsibility norms.
The proposed move comes at a time when the Centre has notified the new Companies Act, 2013, which mandates large companies to contribute 2 per cent of their profit on CSR activities from the next fiscal onwards.
Commenting on reports that Chhatisgarh government's CSR policy may not be in conformity with the Companies Act, Corporate Affairs Minister Sachin Pilot said: "CSR (rule) is now passed through a bill in Indian parliament.
"If a government is trying to create another mechanism by trying to get money deposited in chief minister's welfare scheme, or whatever it is called, that is not tenable," Pilot told reporters at an event.
"...we have already written to the chief secretary of Chattisgarh, pointing out that you can't then pocket this kind of money on what is ... (a) national law through Companies Act, and so that is not legally tenable and we have tried to clarify that to the government of Chattisgarh," he added.
When contacted, N Baijendra Kumar, Principal Secretary in Chattisgarh government's Department of Commerce and Industries, told news agency over telephone: "We have made a CSR policy to make spending by companies more transparent and responsible.
"We have not received any such letter till now as and when and if it comes we will react appropriately. Surprised we come to know of such letters through press during this modern era of fast communication," Kumar said.
The new Companies Act makes it mandatory for profit making companies reporting Rs 5 crore or more profits in the last three years to spend at least 2 per cent of their average profits towards CSR activities.
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