CB BureauAccording to the ministry of corporate affairs, the expenses incurred in training and skills enhancement of employees can be counted as a company’s contribution towards corporate social responsibility (CSR), and can be included in CSR spends in the annual report.
The provision has been added in the new Companies Bill, which will be tabled in Lok Sabha. The bill proposes that companies with a net worth of Rs 500 crore and above or turnover of Rs 1,000 crore should voluntarily spend two per cent of their net profits towards CSR activities and report these to their shareholders in annual reports.
‘We are looking at a structured regime where India Inc. may execute certain measures and be considered compliant with CSR activities. These activities have to be reported in a particular format by companies in their annual reports. The information they need to provide include money spent on CSR, details on vocational training provided, institutions and non-government organizations engaged in training, number of people trained and/or absorbed, or self-employed,’ an official in the ministry of corporate affairs told The Indian Express.
Early this month, Chief Election Commissioner SY Qureshi had said that CSR is not charity but a question of one’s very survival. Attending a conference organized by the Bombay Chamber of Commerce and Industry, Qureshi had said that India needs Warren Buffet and Bill and Melinda Gates to teach corporate houses about the need for CSR. ‘What you do is not CSR but corporate social compulsion,’ he had stated.
In December 2009, the ministry had announced voluntary CSR norms on how firms can deal with the expectations of stakeholders and society. A parliamentary standing committee had proposed later that the new Companies Bill must ask companies to mandatorily spend two per cent of their profits towards CSR activities. The ministry, however, plans to make such spend voluntary.