The government has prepared a list of sanitised Non-Governmental Organisations (NGOs), free of any terrorist links or unwanted funding, that can undertake Corporate Social Responsibility (CSR) activities. The Companies Act makes it mandatory for corporate houses to spend 2% profit on CSR activities.

The first lot of 47 NGOs, of which eight are based in Maharashtra, have been cleared by seven ministries, including the home ministry and the Intelligence Bureau, Bhaskar Chatterjee, director general and chief executive officer of the Gurgaon-based Indian Institute of Corporate Affairs told dna.

More NGOs would be added to the list, which will help the corporate sector choose their partners in CSR activities. This would grow exponentially as the provisions of Section 135 and Schedule VII of the Companies Act has come into effect from April 2014.

"All these NGOs have been cleared by as many as seven ministries, including the home ministry so that they are not blacklisted by the government later. Many NGOs are under the scanner for various transactions and alleged terrorist links. All NGOs in our database have been cleared by the home ministry and the Intelligence Bureau. The corporate sector can now pick from this list of sanitised NGOs," Chatterjee, who heads the institute formed by the ministry of corporate affairs, said.

The books of accounts of all NGOs, their certificates and all documents have been certified by statutory auditors.

"Rules say corporates shouldn't undertake CSR activities on their own. So corporates are looking for such NGOs and trusts which would undertake these works. Again, there is a huge trust divide between corporates and NGOs and one views the other with a great deal of suspicion. How do these corporates know these NGOs are dependable? We had invited civil societies to get them registered with us. And now, we have put up the first list of 47 NGOs. The due diligence that we are doing would help bridge the gap," he said

Due diligence is a continuous process. "After all, there are about 3.3 million NGOs in the country. It's not that we will be doing due diligence for everybody. It's a voluntary process and those who feel they can do a good job of corporate CSR only need to apply."

Now that CSR would soon become an activity backed by law, the government in February notified the National Monitoring Committee on CSR, headed by Anil Baijal to suggest ways as to how the government will monitor their activities.

"There is a universe of 16,000 corporates which are going to undertake CSR activities as per Companies Act, and some years down the line there would be questions asked about what exactly these corporates and NGOs are doing. This committee will recommend to the government the mechanism for monitoring," he said.

By September, when a majority of the auditing of corporate accounts would be over, statutory disclosure in published annual reports of 2014-15 would reflect the CSR work they are doing.

The need to create a list of approved NGOs was also felt under the provisions of the Companies Act. Only 13 activities, including contribution to Swachch Bharat Abhiyaan and Clean Ganga campaign, would be treated as acceptable CSR activities and there is a need to have agencies who can execute, Chatterjee said.

List of NGOs approved in Maharashtra

1. Abled Disabled All People Together (ADAPT)

2. Bombay Natural History Society

3. Ganga Shikshan Prasarak Mandal

4. International Resources for Fairer Trade

5. MESCO (Modern Education Social and Cultural Organisation)

6. Prayas (A Field Action Project of the Tata Institute of Social Services)

7. The Society for Door Step School

8. Kripa Foundation