CSR obligation: Panel for making non-compliance a civil offence

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Updated: August 14, 2019 7:16:52 AM

The high-level committee, constituted in October 2018, made recommendations on strengthening the CSR ecosystem, including monitoring implementation and evaluation of outcomes.

The panel also emphasised on not treating CSR as a means of resource gap funding for government schemes.The panel also emphasised on not treating CSR as a means of resource gap funding for government schemes.

A high-level committee on corporate social responsibility (CSR), headed by corporate affairs secretary Injeti Srinivas, on Tuesday presented its report on review of the existing CSR framework to finance minister Nirmala Sitharaman. The panel has recommended in favour of making CSR expenditure tax-deductible.

“The committee has also recommended that companies having CSR prescribed amount below Rs 50 lakh may be exempted from constituting a CSR Committee. The committee has also recommended that violation of CSR compliance may be made a civil offence and shifted to the penalty regime,” the ministry of corporate affairs (MCA) said.

The other key suggestions made by the panel include a provision for carrying forward unspent balance for a period of 3-5 years, balancing local area preferences with national priorities, introducing impact assessment studies for CSR obligation of Rs 5 crore or more and registration of implementation agencies on the MCA portal.

Other recommendations include developing a CSR exchange portal to connect contributors, beneficiaries and agencies, allowing CSR in social benefit bonds, promoting social impact companies, and third party assessment of major CSR projects.

The panel also emphasised on not treating CSR as a means of resource gap funding for government schemes. It also favoured discouraging passive contribution of CSR into different funds included in Schedule VII of the Act.

The high-level committee, constituted in October 2018, made recommendations on strengthening the CSR ecosystem, including monitoring implementation and evaluation of outcomes.

Its members included Tata Sons chairman N Chandrasekaran, Bain Capital Private Equity managing director Amit Chandra, IIM (Ahmedabad) professor Anil Gupta, former NBCC chairman AK Mittal and former Additional Solicitor General of India BS Narasimha.

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