National body to monitor CSR funds, project execution likely
It will need to maintain record books and financial statements and will have to furnish audited financial statements to the Registrar of Companies. Among others, there is also a proposal to allow the corporate sector to work with a corporate partner or a non-governmental organisation to execute their CSR initiatives with the approval of the national-level CSR body.
Pilot clarified that the government has no intention of controlling the proposed SPV or the financial entity. “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,” Pilot said.
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.”
The move to float an SPV for use of CSR funds takes its cue from similar mechanisms in countries like France, Mauritius and Indonesia, among others.
In Mauritius, for example, a company or a group of companies with CSR contribution above a threshold value can use an SPV for the implementation of its CSR initiatives provided it meets certain laid-down riders. As per the norms, the administrative costs of the SPV should not exceed 15% of the total expenditure on projects for a CSR fund
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