NEW DELHI: The high-level committee set up by the government to suggest measures and methodology for a proper assessment of corporate social responsibility initiatives taken by India Inc is likely to submit its final report next month.
The CSR panel is likely to recommend setting up of a CSR data analysis platform that will take into consideration details such as funds utilised and geographical areas served, officials said. Besides, the panel is considering several other measures to keep tabs on social spending undertaken by companies indirectly through non-governmental organisations.
An electronic data gathering system for creating the database of companies will also be developed, an official said. The six-member committee headed by former secretary Anil Baijal was constituted in February to recommend suitable methodologies for monitoring compliance of the CSR provisions. The performance of companies with regard to spending and quality of work can be assessed only after the companies file their statutory annual returns on CSR, which are due after September 2015.
The panel has engaged with several industry bodies such as the Federation of Indian Chambers of Commerce and Industry, the Associated Chambers of Commerce and Industry of India, the Confederation of Indian Industry, the Standing Conference of Public Enterprises and the Indian Institute of Corporate Affairs.
“Inputs from all these bodies are being taken on the methodology to assess the CSR activities in the country” said a senior government official, who did not wish to be identified. In April 2014, India became the first country to make CSR activities mandatory for a certain class of companies.
The government at the time was expecting that companies would spend about Rs.15,000 crore towards CSR in a year. But with little clarity in the initial months on the list of activities covered under the schedule VII of section 135 of Companies Act 2013, which deals with CSR, and no penalty provisions in case of companies not complying with the law, experts said the spending will not be more than Rs.7,000 crore
Under the new Companies Act, companies with a net worth of Rs.500 crore or turnover of Rs.1,000 crore or net profit of Rs.5 crore need to spend at least 2% of their average net profit in the preceding three financial years on CSR activities. Schedule VII of the Act provides a list of activities such as housing for economically weaker sections, Clean India, Clean Ganga, education and health that can be undertaken under CSR.
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