CB BureauSachin Pilot, the youngest corporate affairs minister, has proposed to create an independent entity to monitor corporate social responsibility (CSR) fund and ensure proper execution of CSR projects.
The proposed entity, probably a special purpose vehicle (SPV), will be independent body that will be run by corporate bodies and will not see any intervention of the government.
The minister has called representatives of Confederation of Indian Industry (CII), Federation of Indian Chambers of Commerce and Industry (FICCI) and decision-makers at corporate groups to discuss the matter on Tuesday, December 4.
Clarifying that the government has no intention of controlling the proposed SPV or the financial entity, Pilot, in a statement to Financial Express said, ‘The idea is to keep the CSR funds outside of the government’s intervention. Right now, it is a proposal and we are meeting companies and various industry bodies for their feedback and suggestions. The idea is to ensure that the funds are spent on substantial CSR activities.’
The minister’s proposal is in context to industry’s opposition to CSR clause in The Companies Bill, 2011, slated for consideration and passing by Parliament in the current session. The bill makes it mandatory for profitable government and private companies to allocate 2 per cent of their average profits accrued in the preceding three financial years on CSR programmes.
In order to monitor the activities of the proposed entity, which will only have a legal status and will not make profits, the ministry is considering having a national-level CSR body. The proposed entity or the SPV will maintain books and financial statements which will have to be audited and submitted the Registrar of Companies.
Stating that his first priority was to get the Companies Bill passed by Parliament, the minister said, ‘We can always make amendments in the law once it is passed. Of course, this will be done with the active participation and feedback of the corporate sector.’