More on CSR and the Companies Bill

We had earlier discussed the half-way house approach adopted by the Companies Bill, 2011 regarding corporate social responsibility (CSR), whereby CSR spending was not intended to be mandatory, but disclosure thereof was. It appears that there is continued resistance to this approach, and that the Parliamentary Standing Committee reviewing the Bill proposes to look at this issue afresh with a view to reinstating the mandatory nature of CSR spending by companies. Not altogether unexpected, this has been met with some criticism. Moreover, the need to provide tax breaks for CSR spending has also been highlighted.

More importantly, there seems to be some visibility as to nature of review that the Standing Committee may perform. Since the previous review was extensive in nature, reports suggest that only certain new clauses in the Bill inserted subsequent to that exercise will be reviewed this time around. All of these will have implications on the timing of the legislation, and whether the Bill is likely to be taken up for debate and vote during the forthcoming Budget session of Parliament.

About the author

Umakanth Varottil

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.

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