“It is unlikely that the corporate affairs ministry will
make corporate social responsibility (CSR) spends compulsory. The ministry is
using “mandatory CSR spend” as a tool that gives the corporate
affairs minister a power to negotiate with corporate groups,” a senior official
close to the developments told CauseBecause.
There are several
clauses in the proposed Companies Bill, including the mandatory spending of two
per cent of net profits towards CSR, that many corporate groups are objecting
to. And it is believed that when the industry bodies and ministry may sit to
negotiate, they will most likely be given the choice to agree to “other
clauses” or accept mandatory CSR, which of course is of larger concern for the
industries and they may not accept it.
Of late, there has been a lot of buzz in the media about the
corporate affairs ministry making several new regulations that would make it
almost compulsory for businesses to be socially responsible. The news that has
been doing the rounds is that it will be compulsory for every business house to
spend at least two per cent of their annual profits towards CSR. It is also
being said that companies will have to submit a detailed report clarifying how
the two per cent has been spent.
Now that the Companies Bill will be announced anytime within
this month or early April, most of the assumptions will be clarified and the
industry will be relieved of the tension of several uncertainties.