While the introduction of the new Companies Bill in Parliament is eagerly awaited, one issue continues to hold a great amount of attention. Although the concept of corporate social responsibility is generally well-accepted and welcome, more voices are being heard against imposition of a mandatory requirement. Recent pieces by Pratap Bhanu Mehta and Ajay Shah and a Business Standard editorial argue that a mandatory CSR would amount to a tax and even expropriation, and that social responsibility must be dealt with at the shareholder level rather than at the company level (with the intention that shareholders who reap rewards from investments in companies may contribute at their volition to socially responsible commitments rather than imposing social duties on companies).
Umakanth Varottil is an Associate Professor at the Faculty of Law, National University of Singapore. He specializes in corporate law and governance, mergers and acquisitions and cross-border investments. Prior to his foray into academia, Umakanth was a partner at a pre-eminent law firm in India.