India Inc slams making CSR spend mandatory
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Indian corporate companies continuously denying reservation for SC/ST opposing by parliamentary bill.   Now they want stall the parliamentary bill on CSR .  Govt should consider to made it mandatory apportionment of CSR fund according to the population of SC/ST.

Attempts by corporate affairs minister Murli Deora to make corporate social responsibility (CSR) spending mandatory in the new Companies Bill has come in for sharp criticism. While accepting the significance of CSRactivities,leadingmembers of India Inc said that any attempt to make it mandatory would be a "retrograde" step.


Rahul Bajaj, chairman of Bajaj Auto and an industrialist vocal on policy issues, said that since corporate houses were already engaged in various CSR initiatives, there was no case for making it mandatory . "I have spoken to Murli Deora (corporate affairs minister) on the issue. Since CSR spending is a question of conscience, there is no case for making it mandatory ," Bajaj said.



Healsodismissedthegovernment's view that the industry was divided on the matter. "No responsible industrialist can ask for making it mandatory ," he said.

Bajaj also said that since therewasnoacceptabledefinition for CSR, the move is not in the right direction.



Agrees Tata Communications chairman Subodh Bhargava when he says that since CSR spending was entirely a corporate entity's personal choice, no legislation was needed. Bhargava said that if the government finally decides to make the clause mandatory, then it could also lead to manipulation. "If a company's intent is not to invest in CSR, then no law in land could change that," he said.



Maruti Suzuki chairman RC Bhargava said that distribution of net profit should be decided by shareholders and not the government.Hequestionedthegov ernment'sabilitytomonitor how companies were spending on CSR and what constitutes CSR. "The issue really is on the practical side of makingtheproposalmandatory. Today, the government wants to pass a law on how companies should distribute profits. Tomorrow, it may be on something else.

How does the story end?" On Thursday, corporate affairs minister Deora had said that he was "personally" in favour of making it mandatory for companies to set aside 2% of their net profits on CSR activities.

His deputy in the ministry RPN Singh had also said that the government was trying to reach a consensus on the issue.
Moser Baer chairman Deepak Puri said that while he was a supporter of CSR, any move to make the proposal mandatory would be counterproductive. "Within Moser Baer, the board of directors have approved CSR investments of up to 1%.

While CSR is a necessity, it should not be thrust upon companies. That's not right," Puri said. Senior corporate lawyer Lalit Bhasin termed the government's proposal as a retrograde step. He argued that industry was within its rights to oppose the move.

"There has to be a legal basis for implementing such a move. Let the proposal be voluntary; otherwise, companies can misuse it by finding a way around the law," Bhasin said.

An industry leader who did not wish to be named said that the government's stand on the issue would take India back to the licence raj. "The government should not dictate how companies are going to plan out their expenditure. If the proposal does become law, then it would be unfortunate," he said. The issue first came to light when the parliamentary standing committee on finance headed by senior BJP leader Yashwant Sinha proposed mandatory implementation of CSR spending. The committee argued that companies which have a net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore should set aside 2% of their average net profits for the last three financial years for CSR. Sinha told FE that the proposal had the support of the ministry of corporate affairs as well. "Every company must spend 2% of their profits on CSR. We are trying to employ social responsibility for the corporate sector. If voluntary action has not worked, then it has to become mandatory," he said.
Source: The Financial Express dated 20.02.2011

2% CSR spend must for firms

It is wake up call for Dalit Intellectuals to demand for adoption of dalits villages by Govt and Private Corporate companies to give basic amenities from the profits earned by  these companies.
India Inc should brace to set aside a specified portion of its profit on corporate social responsibility (CSR). The ministry of company affairs (MCA), which is finalising the new Companies Bill, has accepted a Parliamentary Standing Committee’s recommendation on the issue. The standing committee on finance headed by former finance minister Yashwant Sinha has proposed that companies with a turnover of Rs 1,000 crore or net profit of Rs 5 crore or more earmark 2% of their net profit for the preceding three years on CSR.


Though corporates and industry chambers had lobbied hard against the move, the government has decided to go ahead with the proposal. It is, however, unclear what really constitutes spending on CSR. The standing committee had said that companies would decide the policy and the spending.

While mandating CSR spend, the government had decided against policing and will leave it to companies to implement what is being prescribed in the law. In case a company fails to meet the prescribed spend, it will have to spell out the reasons for the shortfall to its shareholders.

The CSR spending proposed to be mandated in the new Companies Act would be in addition to what is being prescribed for companies in the mining or the coal sector. For instance, in case of Posco, the environment ministry has asked the Korean company to spend 2% of its annual profit on CSR.

The coal ministry is also toying with the idea of mandating a CSR levy on miners who dig for the mineral in the so-called No-Go areas that are environmentally sensitive.

The proposal for mandating a CSR spend was first discussed by the corporate affairs ministry around two years ago but it had to be turned into a voluntary exercise in the wake of protests from companies. But armed with a recommendation from parliamentarians, the ministry is now set to implement its plan.

The revised Companies Bill will be placed in Parliament during the Budget session that starts later this month. The bill has been sent to law ministry for vetting, corporate affairs minister Murli Deora said. Corporate India has, however, got one last chance to present its case when the ministry meets industry representatives next week.
Source: The Times of India dt 10.02.11

What is CSR?.  The CSR of IOC Policy will throw light on how this funds are managed by the companies. 

Indian Oil Corporation Ltd.

Policy for Activities under Corporate Social Responsibility a) Expenditure not exceeding 2% of the Retained Profit of the previous year can be incurred towards corporate social responsibility every year. (This is against the ceiling of 0.75% of Net Profit, which was in force hitherto). The above amount is inclusive of the annual contribution of Rs.10.00 crores towards IndianOil Foundation. b) The donations/contributions and CD activities should be focused in specific target areas to establish a corporate culture on the subject. As such, after paying/allocating the annual contribution towards IndianOil Foundation, the remaining amount would be utilized as per the following break-up: • A minimum of 35% towards national causes/natural calamities. • Amount not exceeding 5% towards donations/contributions. • 30% towards Community Development activities including Special Component Plan and Tribal Sub Plan. • 20% towards IOC’s scholarship, of which 50% amount would be utilized towards providing scholarships to the students belonging to weaker sections of society and 50% amount for others. • 10% towards “other” activities. c) While utilizing the Community Development Funds, more emphasis should be laid on the projects of providing Clean Drinking Water, Health & Medical Care and Education as under to the extent possible: • 40% towards Clean Drinking Water • 40% towards Health & Medical Care • 20% towards Education for further information please click the following link http://www.iocl.com/Aboutus/IndianOil_CSR_Policy.pdf

“Companies must spell out CSR policy” (on Coporate socio responsibility )-25% SC/ST population contributing their labour and money for growth of private and govt corporate sectors.

Dalit thinkers,parties and leaders should demand corporate social responsibility fund be utilised for upliftment of SC/STs and living condition in the villages by adopting residential colony of dalit to provide basic amenities and providing health care and education.

        Persons from affluent section among the societies asking for scholarships !  Dalits leaders and political parties are keeping mum when thousands of crores spent by caste corporate sectors for environment when thousands of dalits and adivasis in need of basic amenities ,health care and education.

Each company must voluntarily spell out its corporate social responsibility (CSR) philosophy and plough some of its profits back into the community, said T.T. Srinivasaraghavan, Managing Director of Sundaram Finance.
“Every corporate body has a responsibility to give back to the community that has made us who we are,” Mr. Srinivasaraghavan added.

He was speaking at a press interaction on the sidelines of the fifth edition of the T.S. Santhanam Memorial Veterans' Tennis Championship jointly organised here on Saturday by the TVS group and Mylapore Sports Club.
Source: The Hindu dated 07.02.2011