07/10/2022 - Economy

KEY POINTS

·        Ever since the establishment of the Corporate Social Responsibility (CSR) regime in India under Section 135 of the Companies Act 2013, CSR spending in India has risen from Rs.10,065 crore in 2014-15 to Rs.24,865 crore in 2020-21.

·        If a company spends an amount in excess of the minimum 2%, as stipulated, the excess amount is liable to be set off against spending in the succeeding three financial years.

·        The latter proviso in the Act weakens the former provision since the requirement of 2% is only a minimum requirement.

·        A high-level committee observed in 2018 that the emphasis on ‘local area’ in the Act is only directionary and that a balance has to be maintained.

·        The Standing Committee on Finance had also observed that the information regarding CSR spending by companies is insufficient and difficult to access.

·        Invest India’s ‘Corporate Social Responsibility Projects Repository’ on the India Investment Grid (IIG) can serve as a guide for such efforts.

·        This model would be very useful for supporting deserving projects in the 112 aspirational districts and projects identified by MPs under the Government’s Sansad Adarsh Gram Yojana.

·        CSR non-spend, underspend, and overspend should be qualified by the auditor in the audit report as a qualification to accounts, and not just as a note to accounts.

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