The NSE Centre for Excellence in Corporate Governance (CECG) has issued its most recent quarterly briefing titled “Environmental and Social Reporting by Indian Companies”, which I have authored. The executive summary is as follows: Recent years have witnessed a strong focus on long-term sustainable value in companies rather than short-term profitability. The need for greater transparency on...
The Threat of Unconstitutionality to Explanation II to Section 37 of the Income Tax Act
[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] Explanation II added to Section 37 of the Income Tax Act, 1961 (“IT Act”), which became effective from 1 April 2014, runs the risk of violating Articles 14 and 19 of the Constitution of India. This post explains the reason behind this proposition. Explanation II states that any...
Resolving Ambiguities in CSR Provisions
[Bunny Sehgal is an Associate at Vinod Kothari & Co. and can be reached at [email protected]] With the enactment of the Companies Act, 2013 (‘Act’), India has become one of the leading countries to mandate spending on corporate social responsibility (‘CSR’) activities through a statutory provision. Since then CSR has become a topic of interest for corporates. Further, with the passage...
Corporate Governance and Sustainability
Professor Vikramaditya Khanna has authored the latest edition of the NSE Quarterly Briefing titled “Global Asset Managers and the Rise of Long Term Sustainable Value”. The executive summary is as follows: – The largest global asset managers (e.g., BlackRock, State Street) have stated that long term sustainable value (LTSV) is their key goal with respect to the firms in which they invest...
Non-Deductibility of CSR Expenditure under the Income Tax Act: Some Concerns
[Priya Garg is a 5th year student at West Bengal National University of Juridical Sciences (WBNUJS), Kolkata] The Income Tax Act, 1961 (“IT Act”) allows various business expenses to be claimed as ‘deductions’ while computing taxable income under the head ‘profit and gains of business or profession’.[1] Section 37 of the IT Act is a residuary provision on deductions. It permits any business...
Presenting a Critique of Green Financing in India
[Priya Garg is a 4th year student at the West Bengal National University of Juridical Sciences (WBNUJS)] The concept of “green banking” has two primary aspects – first, making banks and other financial institutions conduct their operations in an environment-friendly manner; second, their role of extending credit on favourable terms to eco-friendly projects. For the purpose of this post, I refer...
CSR Provisions in Operation
In the latest NSE quarterly briefing titled “Statutory CSR Under the Companies Act – Stylized Facts and the Way Forward”, Professor Subrata Sarkar examines the manner in which companies have complied with the provisions relating to corporate social responsibility (CSR) under the Companies Act, 2013. An executive summary of the briefing is as follows: – The legal provision mandating CSR...
Calls for Socially Responsible Investing
The concept of socially responsible investing (SRI) suggests that investors would invest in companies that are acting in socially and environmentally responsible ways, and that such investors would exit from investments in businesses that do not comport with environmental, social and governance (ESG) criteria. Such investors maintain a balance between financial sustainability and social impact...
Comparative Paper on Corporate Purpose
Professor Afra Afsharipour has posted on SSRN a paper titled “Redefining Corporate Purpose: An International Perspective”, the abstract of which is as follows: Over the past decade, corporate law in India has begun a reform journey with important implications for not only corporate governance, but also for deeper questions about the purpose of the corporation and beneficiaries of the corporate...
Empirical Analysis of CSR Requirements in India
Professors Dhammika Dharmapala and Vikramaditya Khanna have posted an interesting paper on SSRN that is titled “The Impact of Mandated Corporate Social Responsibility: Evidence from India’s Companies Act of 2013”, the abstract of which is as follows: Firms’ Corporate Social Responsibility (CSR) activity has become the subject of a large literature in recent years. This paper analyzes CSR activity...
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