India’s firm nudge towards philanthropy in the new companies law, which replaces an outdated legislation with more streamlined rules, is being viewed with misgivings by some, but is likely to boost corporate charitable activity in the country, Mint reporteed.
The new law to govern firms doing business in India has been approved by the Parliament and requires a formal presidential sanction. It has for the first time laid down ground rules for corporate social responsibility (CSR).
Companies with a net worth of more than Rs.500 crore or revenue of more than Rs.1,000 crore or net profit of more than Rs.5 crore have been asked to spend at least 2% of their annual net profit towards CSR. Although the law does not stipulate penalties for non-compliance, companies are required to justify any shortcoming in this regard.
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