CB BureauIt is needed… It restricts the meaning of corporate social responsibility (CSR)… Why force it on the private sector… It does not have teeth… It must be taken seriously… It will bring about the desired change… It is just another Act on paper…
The opinion buzz is on and every stakeholder has his own views on the recently created legislation that mandates spending towards CSR for the private sector. While some stakeholders are totally in favour of it, some others are finding faults and are already seeking amendments; of course, there are some others who are completely indifferent as well.
Here are a few excerpts from the bytes that were in news.
From the ministry
Corporate Affairs Minister Sachin Pilot, the minister who finally saw the bill through both the houses and becoming an Act, said the industry was free to choose CSR programmes and strategies best suited to their company’s philosophy and businesses. Speaking at the summit on CSR by Confederation of Indian Industry (CII), Pilot said the government would adopt a flexible approach on CSR.
One of the youngest ministers in the cabinet, Pilot believes if CSR spending reaches the desired objective one will be able to see tangible results.
In monetary terms, it is estimated that the CSR provision will lead to anything from Rs 19,000 crore to Rs 25,000 crore annual investments in the country’s social sector.
At the same event, Ministry of Corporate Affairs Additional Secretary MJ Joseph said that ‘when it came to embedding CSR into business strategy, the execution and mainstreaming of strategy was of paramount importance.’
From industry bodies
CII is pitching to the government to relax the clause that mandates a three-year track record for an NGO or foundation to receive CSR funding. CII National Council on Development Initiatives Chairman Rakesh Bharti Mittal said that the government norm mandating this be relaxed in the event that a foundation belongs to a reputed company.
From judiciary
‘The central government should recognize corporate houses excelling in activities to do with corporate social responsibility (CSR) by according them tax concessions,’ suggested Justice FM Ibrahim Kalifulla, judge of the Supreme Court.
Addressing a seminar on ‘corporate social responsibility and alternative dispute resolution’ in Chennai, Justice Kalifulla said that firms had the responsibility of working for the welfare of people. Small and medium enterprises should be encouraged to work for the welfare of the people. The state should consider introducing a curriculum on CSR activities in schools and colleges, he added.
Acting chief justice of the Madras High Court, Justice RK Agrawal said that India was the first country in the world to legally mandate corporate spending on social welfare and expressed his hope that it would also be the first in the world to bring about desired changes through the corporate route.
From philanthropists
Azim Premji, founder-chairman of Wipro, India’s third largest software services exporter, does not seem to be too happy with the mandatory clause. In a statement issued to media last week, he said ‘philanthropy cannot be forced and has to be spontaneous.’ However, efforts towards social good needed to be ‘meaningful’ and the government alone was not responsible for ‘social good’.
The billionaire philanthropist stated that giving back to society was important for the growth of a better world but it should come from within. He said that the stipulation of spending two per cent of profits should not become a tax at a later stage.
Premji also cautioned against making CSR a substitute for personal philanthropy. ‘There should be a distinction between a company activity that is CSR and personal activity that is philanthropy,’ he said.
On the other hand, Reliance Foundation Chairperson Nita Ambani has said that the Act shall help in creating sustainable and self-reliant communities. ‘CSR is a process that creates sustainable and self-reliant communities by lending a hand to realize their aspirational goals,’ she had told PTI.
‘I think it is an important step and should be taken in the positive spirit… unless the society moves along taking everybody together, you cannot have a sustainable society,’ Ambani had said while commenting upon the new Act.
To be continued with reactions from more stakeholders including CSR heads at corporate groups as well as foundations and NGOs at the grassroots. If you are one of them, please mail your comments/opinion on the new Act to [email protected]