This write-up gives an insight into legal cobwebs around corporate social responsibility (CSR) in India. To read more my articles and news in the larger domain of corporate governance and several diverse domains, visit nareshminocha.com.
The Companies Act, 2013 has become the law of the land after being notified on 30 August, 2013. The law, which was in the making for more than a decade, ushers in a new era for corporate regulation in India. It introduces massive changes in the way companies govern themselves, raise money and interact with stakeholders. By laying stress on self-regulation and disclosure with minimal Government intervention, the law lays more responsibility on corporates. With 99 sections out of a total of 470 sections already in force, the legislation is amending the way companies operate and are regulated in the country.
CII has been instrumental in ensuring that industry voices were heeded to during each stage of evolution of the Act. Due to concerted efforts, the current form of the Act is a marked progression over the earlier versions which prescribed more rigorous and stringent provisions. Our advocacy still continues with formal submissions on subordinate legislation that forms part of over 70% provisions of the Act. With the Ministry of Corporate Affairs currently working on finalizing rules with views from stakeholders, CII recommendations to the first batch of draft rules have already been submitted on 10 October, 2013. Building up of industry views is currently underway, based on which detailed inputs would be submitted on the remaining sets of rules as well. Submission of formal representations is also being supplemented with industry interactions with the Minister for Corporate Affairs and others at the helm of affairs at the Ministry.
This issue of Policy Watch focuses on the highlights of the new law while intending to apprise members of challenges that corporate regulation now beholds. The issue is also aimed at updating members of CII views on specific provisions while seeking views on draft rules that amplify the requirements.
As a continuation of my last article, “tax the Rich…Tax the Rich…Tax the Rich…,” I asked Brian Seifert, CPA to fill in some additional tax changes that would affect our clients as we approach the year end and look forward to 2010. Brian is a new Aegis Council member who is helping our clients prepare for the onslaught of new taxes by identifying tax planning opportunities, assist the clients taking advantage of their planning opportunities then preparing the tax returns as part of the Aegis Council Tax Planning Package. Every Aegis Council member has undergone a thorough background check and peer reviews to insure only the best and brightest professionals are provided to our clients.
The Companies Act, 2013 has become the law of the land after being notified on 30 August, 2013. The law, which was in the making for more than a decade, ushers in a new era for corporate regulation in India. It introduces massive changes in the way companies govern themselves, raise money and interact with stakeholders. By laying stress on self-regulation and disclosure with minimal Government intervention, the law lays more responsibility on corporates. With 99 sections out of a total of 470 sections already in force, the legislation is amending the way companies operate and are regulated in the country.
CII has been instrumental in ensuring that industry voices were heeded to during each stage of evolution of the Act. Due to concerted efforts, the current form of the Act is a marked progression over the earlier versions which prescribed more rigorous and stringent provisions. Our advocacy still continues with formal submissions on subordinate legislation that forms part of over 70% provisions of the Act. With the Ministry of Corporate Affairs currently working on finalizing rules with views from stakeholders, CII recommendations to the first batch of draft rules have already been submitted on 10 October, 2013. Building up of industry views is currently underway, based on which detailed inputs would be submitted on the remaining sets of rules as well. Submission of formal representations is also being supplemented with industry interactions with the Minister for Corporate Affairs and others at the helm of affairs at the Ministry.
This issue of Policy Watch focuses on the highlights of the new law while intending to apprise members of challenges that corporate regulation now beholds. The issue is also aimed at updating members of CII views on specific provisions while seeking views on draft rules that amplify the requirements.
As a continuation of my last article, “tax the Rich…Tax the Rich…Tax the Rich…,” I asked Brian Seifert, CPA to fill in some additional tax changes that would affect our clients as we approach the year end and look forward to 2010. Brian is a new Aegis Council member who is helping our clients prepare for the onslaught of new taxes by identifying tax planning opportunities, assist the clients taking advantage of their planning opportunities then preparing the tax returns as part of the Aegis Council Tax Planning Package. Every Aegis Council member has undergone a thorough background check and peer reviews to insure only the best and brightest professionals are provided to our clients.
An essential guide to UK employment law for everyone involved in managing people.
It covers contracts of employment, employment rights, pay and hours, holidays, family matters, flexible working, trades unions, equality and discrimination, changing terms and conditions, dismissal, discipline and grievance, redundancy, redundancy payments, consultation, employment tribunals, and collective labour law.
Health Reform Bulletin 145 | 2020 Indexed Adjustments for MEC and ESR Penalti...CBIZ, Inc.
1) 2020 Indexed Adjustments for MEC and ESR Penalties; 2) Proposed Rules for Individual Coverage Health Reimbursement Arrangements; and 3) FAQ Guidance Clarifies Cost Sharing – Prescription Drug Coupons
The much-awaited Budget is finally out.Finance Minister Shri Arun Jaitley announced the Union Budget 2018-19 on 01st February. Overall, the government in an effort to achieve its objective of reducing poverty, expediting infrastructure creation and building a strong, confident and a New India, in its Budget, has retained its focus on giving a push to the rural economy and the agricultural sector.
Corporate India shall be majorly benefited by rationalization of corporate Income Tax to 25% whereby 99% of the corporate tax payers who clock turnover below.
Rs. 250 Cr in the previous year will be benefited.
We at APMH are determined to demystify the budget from a compliance angle and are excited to present our "Union Budget E - Booklet 2018-19 on various developments in Direct & Indirect Taxes announced in the Union Budget and their implications for Businesses.
Understand how Union Budget 2018 will impact you with in-depth analysis and insights from our tax and industry experts.
We are sure that it will prove as a useful reference material for you and your team throughout the year.
Welcome to the Autumn 2013 edition of the BHW Employment Law Newsletter.
It seems that despite Government rhetoric to leave employment law alone, the Ministers can’t help themselves from dabbling in the area!
We have therefore collated information on the most important changes to help keep you up to date.
Rollits Dispute Resolution Newsletter October 2016 Pat Coyle
Legal newsletter from Rollits LLP including a Sale of Goods update and definitive sentencing guidelines for H&S, corporate manslaughter and food safety
Greetings
Union budget for FY 2018-19 was presented by Hon'ble Finance Minister Shri. Arun Jaitely . As most of you are aware, this budget is unique being presented before election in 2019
Lexology Getting the Deal Through Employment: InternationalMatheson Law Firm
Niall Pelly, Alice Duffy and Rachel Kelly outline the key considerations for international employers in Ireland including disciplinary procedures and the courts system.
Make in India - Key Government Initiatives towards Make in Maharashtra - Part -3Resurgent India
In the last year or so, the state government has taken a slew of initiatives to make the ‘Make in Maharashtra’ campaign successful. The impact of these measures can be seen with the rise in investments in the state.
PPT on Key Recommendations of Task Force on New Direct Tax CodeCA PRADEEP GOYAL
A committee formed to look into direct tax law reform submitted its report to Union FM Nirmala Sitharaman. The panel was headed by Akhilesh Ranjan, a member of Central Board of Direct Taxes. The aim of the exercise is to make direct tax laws modern and simpler, as well as widen the tax base
CBIZ Manufacturing & Distribution Quarterly Newsletter - Feb 2020CBIZ, Inc.
Timely articles on topics of interest to manufacturers and distributors including - the expansive SECURE Act (retirement legislation), Benefits Renewal (six questions to ask), Risk (rethinking your profile for the new decade), the Hardening Insurance Market (what to expect, how to prepare) and the NAM Talks Trade - plus quick links to complimentary guides and webinars.
An essential guide to UK employment law for everyone involved in managing people.
It covers contracts of employment, employment rights, pay and hours, holidays, family matters, flexible working, trades unions, equality and discrimination, changing terms and conditions, dismissal, discipline and grievance, redundancy, redundancy payments, consultation, employment tribunals, and collective labour law.
Health Reform Bulletin 145 | 2020 Indexed Adjustments for MEC and ESR Penalti...CBIZ, Inc.
1) 2020 Indexed Adjustments for MEC and ESR Penalties; 2) Proposed Rules for Individual Coverage Health Reimbursement Arrangements; and 3) FAQ Guidance Clarifies Cost Sharing – Prescription Drug Coupons
The much-awaited Budget is finally out.Finance Minister Shri Arun Jaitley announced the Union Budget 2018-19 on 01st February. Overall, the government in an effort to achieve its objective of reducing poverty, expediting infrastructure creation and building a strong, confident and a New India, in its Budget, has retained its focus on giving a push to the rural economy and the agricultural sector.
Corporate India shall be majorly benefited by rationalization of corporate Income Tax to 25% whereby 99% of the corporate tax payers who clock turnover below.
Rs. 250 Cr in the previous year will be benefited.
We at APMH are determined to demystify the budget from a compliance angle and are excited to present our "Union Budget E - Booklet 2018-19 on various developments in Direct & Indirect Taxes announced in the Union Budget and their implications for Businesses.
Understand how Union Budget 2018 will impact you with in-depth analysis and insights from our tax and industry experts.
We are sure that it will prove as a useful reference material for you and your team throughout the year.
Welcome to the Autumn 2013 edition of the BHW Employment Law Newsletter.
It seems that despite Government rhetoric to leave employment law alone, the Ministers can’t help themselves from dabbling in the area!
We have therefore collated information on the most important changes to help keep you up to date.
Rollits Dispute Resolution Newsletter October 2016 Pat Coyle
Legal newsletter from Rollits LLP including a Sale of Goods update and definitive sentencing guidelines for H&S, corporate manslaughter and food safety
Greetings
Union budget for FY 2018-19 was presented by Hon'ble Finance Minister Shri. Arun Jaitely . As most of you are aware, this budget is unique being presented before election in 2019
Lexology Getting the Deal Through Employment: InternationalMatheson Law Firm
Niall Pelly, Alice Duffy and Rachel Kelly outline the key considerations for international employers in Ireland including disciplinary procedures and the courts system.
Make in India - Key Government Initiatives towards Make in Maharashtra - Part -3Resurgent India
In the last year or so, the state government has taken a slew of initiatives to make the ‘Make in Maharashtra’ campaign successful. The impact of these measures can be seen with the rise in investments in the state.
PPT on Key Recommendations of Task Force on New Direct Tax CodeCA PRADEEP GOYAL
A committee formed to look into direct tax law reform submitted its report to Union FM Nirmala Sitharaman. The panel was headed by Akhilesh Ranjan, a member of Central Board of Direct Taxes. The aim of the exercise is to make direct tax laws modern and simpler, as well as widen the tax base
CBIZ Manufacturing & Distribution Quarterly Newsletter - Feb 2020CBIZ, Inc.
Timely articles on topics of interest to manufacturers and distributors including - the expansive SECURE Act (retirement legislation), Benefits Renewal (six questions to ask), Risk (rethinking your profile for the new decade), the Hardening Insurance Market (what to expect, how to prepare) and the NAM Talks Trade - plus quick links to complimentary guides and webinars.
Concept of Corporate social responsibility
2. Types of CSR
3. Advantages
4. Concept of CSR under Indian law
5. Companies involved in CSR
6. Concept of CSR under English law
7. Conclusion
India became the first country to mandate spend on CSR activities through a statutory provision after the President of India gave assent to the Companies Bill, 2013,.
The Provision of Corporate Social Responsibility (CSR) are effective from financial year 2014-15.
As per Section 135 of the Act, every company with a specified net worth or turnover or net profit are required to mandatorily spend 2 percent of its average net profit towards specified CSR activities.
Though many corporate houses in India have been doing CSR activities voluntarily, the new CSR provisions put formal and greater responsibility on companies to set out clear framework and process to ensure strict compliance.
The Board of Directors of the companies are responsible to ensure that the company spends the mandatory CSR spend on specified CSR activities in accordance with the CSR policy of the company and disclose the CSR policy and CSR activities of the company as specified in the provisions.
Each qualifying company should form a CSR committee which will formulate the CSR policy of the company and effectively monitor the CSR activities of the company.
The Ministry of Corporate Affairs (MCA) has issued draft rules on CSR for public discussion. The said draft CSR rules lay down the framework and guidance on the manner in which every eligible company is expected to undertake CSR initiatives.
CSR-Legislation In India & the world
Section 135 of Companies Act 2013
Scope for CSR Activities under Schedule VII
Appointment of Independent Directors on the Board
The Drivers of CSR in India
Changing expectations of social responsibility
four faces of social responsibility
the regulatory environment in India Counter trends
Performance in major business and programs
Assessment of CSR Law in Companies Act, 2013 – An Analysis of the Performance...inventionjournals
Introduction: The new law making CSR expenditure and reporting mandatory for certain companies is a new chapter in the Indian corporate world and has provided a necessary boost to the status of companies’ responsibility towards the stakeholders, and transparency and accountability of their actions. Need: The mandatory 2% spending of profits on CSR activities got mixed reaction from corporate executives. To ensure that the enforcement of the law isn’t limited to the term “cheque-book CSR”, regular exploration of the companies’ CSR expenditures and their consequent outcomes is absolutely essential. Objective: The paper aims to assess the outcome of Section 135 of the Companies Act, 2013, in the first year of its implementation among the BSE-SENSEX companies. Research methodology: Secondary sources were utilized for collecting profits and CSR expenditure figures of the selected 30 companies for conducting an ex-post analysis for the year 2014-15. Key findings of the study: Less than 15% of the BSE-SENSEX companies had spent on CSR activities an amount that is equal to or greater than the stipulated 2% of the average profits of the preceding 3 years as per Section 135 of Companies Act, 2013. Implications: Immediate attention of regulatory bodies is desired towards companies failing to dispense the funds earmarked for CSR as stipulated by the law to ensure compliance.
Everybody is talking about Environmental, Social and Governance (ESG) nowadays,
however, it’s not immediately apparent what the real implications are for
medium-sized companies. Gábor Szendrői, Managing Partner, and Judit Pókos,
Organizational Development Manager, at Concorde MB Partners – IMAP Hungary
took a deep dive into the current regulations, as well as conducted a series of
interviews with SPAR Hungary, a large food retailer and MOL, an international oil
group, along with the Hungarian National Bank, Hungarian Stock Exchange and
other several key players in the Hungarian economy, in order to better understand
what ESG really means in terms of obligations and repercussions for mediumsized
companies. They share their findings on the indirect, yet highly important
aspects of ESG regulations with Creating Value.
CSR Contribution made by selected Indian Manufacturing Multinational Companiesijtsrd
"The concept of CSR has gained lot of significance lately. But in India, complying provisions of CSR becomes mandatory after introduction of CSR policy in Indian Companies Act, 2013 for the companies who fulfill the certain criteria as mentioned. The rationale behind CSR is to embrace the responsibility for companies’ action and encouraging the positive impact through its activities on environment, healthcare, livelihood, rural development, education and so on. The present study has made an attempt to understand the CSR policy initiatives made by four major companies in India. All the data collected and used for research work is secondary in nature like official websites and reports published by companies, magazines, journals and other reference books. The purpose of this paper is to know the contribution made by four top Indian manufacturing MNC and analyze the same. These companies are drawn from ‘The CSR Journal Miss. Charuta P. Kulkarni ""CSR Contribution made by selected Indian Manufacturing Multinational Companies"" Published in International Journal of Trend in Scientific Research and Development (ijtsrd), ISSN: 2456-6470, Special Issue | Fostering Innovation, Integration and Inclusion Through Interdisciplinary Practices in Management , March 2019, URL: https://www.ijtsrd.com/papers/ijtsrd23055.pdf
Paper URL: https://www.ijtsrd.com/management/strategic-management/23055/csr-contribution-made-by-selected-indian-manufacturing-multinational-companies/miss-charuta-p-kulkarni"
Frequently Asked Questions (FAQs) on Corporate Social
Responsibility (CSR), Ministry of Corporate Affairs, Government of India.
The broad framework of CSR has been provided in Section 135 of the Companies Act, 2013 (herein after referred as ‘the Act’), Schedule VII of the Act and Companies (CSR Policy) Rules, 2014 (herein after referred as ‘the CSR Rules’). Further, Ministry
had also issued clarifications including FAQs from time to time on various issues concerning CSR.
01062024_First India Newspaper Jaipur.pdfFIRST INDIA
Find Latest India News and Breaking News these days from India on Politics, Business, Entertainment, Technology, Sports, Lifestyle and Coronavirus News in India and the world over that you can't miss. For real time update Visit our social media handle. Read First India NewsPaper in your morning replace. Visit First India.
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role of women and girls in various terror groupssadiakorobi2
Women have three distinct types of involvement: direct involvement in terrorist acts; enabling of others to commit such acts; and facilitating the disengagement of others from violent or extremist groups.
‘वोटर्स विल मस्ट प्रीवेल’ (मतदाताओं को जीतना होगा) अभियान द्वारा जारी हेल्पलाइन नंबर, 4 जून को सुबह 7 बजे से दोपहर 12 बजे तक मतगणना प्रक्रिया में कहीं भी किसी भी तरह के उल्लंघन की रिपोर्ट करने के लिए खुला रहेगा।
03062024_First India Newspaper Jaipur.pdfFIRST INDIA
Find Latest India News and Breaking News these days from India on Politics, Business, Entertainment, Technology, Sports, Lifestyle and Coronavirus News in India and the world over that you can't miss. For real time update Visit our social media handle. Read First India NewsPaper in your morning replace. Visit First India.
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हम आग्रह करते हैं कि जो भी सत्ता में आए, वह संविधान का पालन करे, उसकी रक्षा करे और उसे बनाए रखे।" प्रस्ताव में कुल तीन प्रमुख हस्तक्षेप और उनके तंत्र भी प्रस्तुत किए गए। पहला हस्तक्षेप स्वतंत्र मीडिया को प्रोत्साहित करके, वास्तविकता पर आधारित काउंटर नैरेटिव का निर्माण करके और सत्तारूढ़ सरकार द्वारा नियोजित मनोवैज्ञानिक हेरफेर की रणनीति का मुकाबला करके लोगों द्वारा निर्धारित कथा को बनाए रखना और उस पर कार्यकरना था।
In a May 9, 2024 paper, Juri Opitz from the University of Zurich, along with Shira Wein and Nathan Schneider form Georgetown University, discussed the importance of linguistic expertise in natural language processing (NLP) in an era dominated by large language models (LLMs).
The authors explained that while machine translation (MT) previously relied heavily on linguists, the landscape has shifted. “Linguistics is no longer front and center in the way we build NLP systems,” they said. With the emergence of LLMs, which can generate fluent text without the need for specialized modules to handle grammar or semantic coherence, the need for linguistic expertise in NLP is being questioned.
31052024_First India Newspaper Jaipur.pdfFIRST INDIA
Find Latest India News and Breaking News these days from India on Politics, Business, Entertainment, Technology, Sports, Lifestyle and Coronavirus News in India and the world over that you can't miss. For real time update Visit our social media handle. Read First India NewsPaper in your morning replace. Visit First India.
CLICK:- https://firstindia.co.in/
#First_India_NewsPaper
Clear csr legal jungle; don’t treat industry as the kam dehnu for social welfare
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Clear CSR legal jungle; don’t treat industry as the Kam Dehnu for social welfare
Created on Tuesday, 12 August 2014 19:08
Image Courtesy: ONGC
In its zeal to promote social welfare right from the birth (foetus to be precise) to the death, UPA Government botched up
many initiatives including the noble ones like charity and inclusive growth.
It tied the industry in knots to spend money on corporate social responsibility (CSR) through multiple and at times conflicting
and whimsical fiats issued by different ministries.
India is perhaps the only country that explicitly mandates CSR expenditure through a corporate law, as compared to statutory reporting on
voluntary CSR practiced in certain countries such as Denmark. India is certainly the only country that has multiple laws/diktats on CSR.
Modi Government wants to be viewed as better and larger promoter of public welfare than its predecessor. The former has thus tried to rationalize
the latter’s mess through a recent clarification issued by the Ministry of Corporate Affairs (MCA).
In a circular dated 18th June 2014, MCA has clarified that “expenses incurred by companies for the fulfillment of any Act/ Statute of regulations
(such as Labour Laws, Land Acquisition Act etc.) would not count as CSR expenditure under the Companies Act.”
This implies that companies would have to incur all mandatory social welfare expenditure stipulated under different laws whose
aggregate might render certain projects unviable especially the ones that face competition from zero-duty or concessional duty
imports under free trade agreements.
The cumulative impact of mandatory CSR on the business appears daunting when one includes expenditure on essential environmental
management plan (EMP). As social welfare and environment protection are globally accepted as integral components of larger domain of CSR, the
Government should compute the overall impact of these mandatory expenditures as well as several welfare cess.
The compliance with different statutory guidelines might result in regulatory chaos if the case of Oil and Natural Gas Corporation (ONGC’s) CSR
expenditure relating to Mehsana assets in Gujarat is any indication. This case would be discussed later in the column to drive home the need for
single and simple statutory regulation on CSR.
Leave aside for a while the viability of projects, reduced profitability of companies and compliance complications resulting from multiple fiats.
Consider the fact that no one in the Government has realized the adverse impact of complex CSR regime on the industry’s income tax-generating
potential. Nor has it yet dawned on the Government that CSR would increase the cost of products, services and utilities as the businesses are
known for passing the costs to the ultimate consumer.
The governance complexity would accentuate if the Government accepts the industry’s demand for grant of tax concessions for CSR. As it is, the
Government grants tax exemptions to donations made in funds such as Prime Minister’s National Relief Fund and specified trusts & institutions.
As the contributions to these funds are exempted from Income Tax under section 80(G),the companies might prefer to make lumpsum donations
to such funds to avail tax benefit. This would also defeat the objective of decentralized implementation of CSR schemes. Charity should neither be
tax-induced nor mandated through laws in an enlightened, humane society.
To understand the implications of emerging CSR regime, we need to list and analyze all CSR regulations. MCA has recently substituted its CSR
Voluntary Guidelines (CSRVG) issued in December 2009 with CSR rules framed under the Companies Act 2013.
Under the Companies (Corporate Social Responsibility Policy) Rules that have become effective from 1st April 2014, MCA has specified the
governance regime for implementation and enforcement of CSR expenditure.
The Act stipulates that every company having net worth of Rs. 500 crores or more, or turnover of Rs. 1000 crores or more or net profit of rupees
five crores or more during any financial year, would spend at least 2 per cent of its average net profits of the previous three year on CSR activities.
With unveiling of these statutory regulations, the Department of Public Enterprises (DPE) has revised its CSR guidelines for central public sector
enterprises (CPSEs). It has thus given up its stance articulated in April 2010 that DPE “guidelines will supersede any other
guidelines/circulars/instructions etc. that may have been issued by any Ministry/Department on any prior date.”
In its latest guidelines effective from 1st April 2014, DPE has referred to CSR rules under the Companies Act, 2013 and clarified that its “guidelines
do not supersede or override any provision of the Act or the CSR rules.” It has thus withdrawn its categorization of CPSEs into three groups that
specified three different slabs of CSR expenditure linked to three slabs of net profit.
DPE says that its latest guidelines are “in the nature of extra initiative or endeavour which the key stakeholders expect of CPSEs in the discharge
of their corporate social responsibility.”
These guidelines are applicable even to profit-earning CPSEs that are not covered under the eligibility criteria based on the threshold limits of net
worth, turnover or net profit as specified by Section 135(1) of the Act. Even these CPSEs would have to spend at least 2% of the profit earned in
previous year on CSR.
Although the Act and CSR rules are silent on carry-forward of unspent CSR fund in a particular year to the next year’s CSR budget, DPE guidelines
provide for this arrangement to ensure that unspent funds don’t lapse and are utilized in subsequent years.
DPE guidelines are thus a mix of its adminstrative order and statutory norms as mentioned in the Companies Act. As these guidelines are
applicable to all profit-earning CPSEs, they put larger responsibility of central public sector as whole as compared to the burden to be borne by
private sector under the Companies Act.
A fundamental limitation of DPE guidelines is that these are silent on the applicability of CSR expenditure stipulated by Ministry of Environment and
Forests (MOEF) in the environmental approval letters issued to companies for their new or expansion projects.
Notwithstanding this, ONGC has sworn by DPE guidelines while refusing to comply with MOEF’s CSR diktat in a letter dated 16th
July 2014 addressed to a MOEF committee, which asked the company to disclose the status of compliance with the conditions
stipulated in the environmental clearance given in April 2009 for drilling of 157 development wells in Mehsana asset.
2. MOEF’s Expert Appraisal Committee (EAC) for industrial projects had sought the compliance report in June this year while deferring a decision on
ONGC’s application seeking permission to drill 350 additional development wells in Mehsana block.
EAC had asked ONGC to disclose its action plan to implement the former’s norm for spending 5% of the project cost on CSR dubbed specifically as
“Enterprises Social Commitment”. ONGC replied that 5% of the project cost of Rs 1167.7 crore for 157 wells amounted to Rs 83.385 crore to be
budgeted as Rs 16.677 crore as annual component of CSR for five years.
Taking the norms of 2% of net profit as mandatory outlay for CSR as applicable to ONGC under DPE guidelines (which the same as envisaged
under the Companies Act), ONGC computed its required CSR expenditure as Rs 418.541crore from net profit of Rs 20925.7 crore in 2012-13. From
this, ONGC computed the Mehsana asset’s CSR budget for 2013-14 at Rs 7.46 crore.
This is not even half of the ESC expenditure computed for the same project under MOEF fiat.
After making these calculations and recalling DPE’s CSR guidelines, the company stated: “ONGC being a CPSE is bound to comply with DPE
guidelines issued for CSR and Sustainability for CPSE and shall always comply in future also as per the DPE guidelines issued/amended.”
It thus requested EAC to review the condition of expenditure on “Enterprises Social Commitment” (ESC) that mandates allocation of 5% of the
project cost on CSR over five years and align this requirement with DPE guidelines.
Ironically, the 5% norm is not stipulated in the environmental clearance (EC) for 157 wells dated 1 April 2009. It is thus yet another
case of retrospective governance. ONGC has not mentioned this fact in its letter to MOEF perhaps because it has miserably failed
to comply with several other conditions mentioned in EC.
A glance through documents of EAC for industrial projects over the years shows that it first mentioned and applied the stipulation for earmarking
5% of the project cost on ESC on certain projects in its meeting held in February 2010.
At its meeting held in February 2014, it has articulated in the generic terms of reference (TOR) for all industrial projects. It reads
as: “At least 5 % of the total cost of the project shall be earmarked for the initial 5 years towards the Enterprise Social
Commitment and 2% of retain profit thereafter for life of the project towards CSR based on public hearing issues and item-wise
details along with time bound action plan shall be included. Socio-economic development activities need to be elaborated upon.”
This expenditure is different from cost of EMP that varies from project to project, technology to technology and location to location. Apart from
pollution control initiatives, EMP includes expenditure on development of green belt in the project area, rain water harvesting, etc.
The 5% capital and 2% recurring CSR norm has, however, not been adopted by six other EAC companies such as the ones for coal
mining and thermal power projects. They have their own CSR norms. EAC for thermal power plants, for instance, stipulates
budgetary provisions for capital CSR cost @ 0.4% of project cost during the construction phase and thereafter annual recurring
CSR cost @ 0.08% of the project cost.
This implies two different CSR norms for coal-based captive thermal plant set up as part of an integrated industrial project such as steel project
and for stand-alone coal-based plants.
EAC for Coal Mining projects stipulates recurring CSR expenditure at rate of Rs 5/tonne of coal and project-specific capital CSR outlay, whereas
EAC for non-coal mining projects has adopted flexible CSR approach. This is evident from JSW Steel Limited’s iron ore mining project in West
Singhbhum district of Jharkhand where EAC asked for allocation of at least 2-3% of the project cost towards CSR activities.
Ironically, none of the mandatory CSR pushed for by EACs has been notified either as policy statement or as amendment rules relating to EC
issued under Environment (Protection) Act.
A project developer has to incur separate expenditure if the project requires forest land. In such case, a company has to pay for compensatory
afforestation, additional compensatory afforestation, Net Present Value (NPV) to State Compensatory Afforestation Management and Planning
Authority (State CAMPA) under the Forest (Conservation) Act.
While there are clear-cut guidelines for expenditure towards compensatory afforestation and NPV, there is no such transparency in the case of
expenditure to be borne by a company if the project affects wildlife area.
This expenditure for wildlife care/management is decided arbitrarily as can be discovered by going through the documents of Standing Committee
of National Board on Wildlife (NBW-SC). The expenditure on this count is also deemed mandatory as wildlife clearances are issued under the Wild
Life (Protection) Act.
Yet another component of UPA’s CSR regime is separate guidelines for CSR expenditure to be borne by major ports that were issued in December
2011.
UPA Government’s CSR labyrinth would have become more complex had it worked for passage of the Minerals (Development and Regulation) Bill
(MMDR Bill), 2011 after receipt of the Parliamentary Standing Committee’s report on the Bill in May 2013.
The Bill has envisaged mineral-specific CSR outlay that has to be deposited with District Mineral Foundations (DMFs), which would be created to
promote socio-economic development of persons in the mining areas.
The Bill, which would have to be introduced afresh in the Lok Sabha by the new Government sooner or later, requires a mining company to pay to
DMF an amount equal to royalty on minerals paid by them to State Governments. This can be a maximum of 10% ad valorem on minerals.
Similarly, the prospective coal mining firms would have to deposit with DMF 26% of its net profit for previous year resulting from the related mining
lease.
These expenses would be in addition to the unspecified CSR expenditure to be incurred by the company as envisaged under the Bill. It also
provides for setting up of mining regulator, appellate authority and competitive bidding for mining leases.
Even before legal CSR frenzy gripped UPA, the Statute Book has had several laws that generate CSR revenue by levying specific
cess on a product or service for welfare of specified category of workers.
One such law is The Building and Other Construction Workers’Welfare Cess Act, 1996 that provides for levy of cess at the rate of 1% of the total
cost of construction
incurred by the employer .
The other laws include The Mica Mines Labour Welfare Fund Act, 1946; The Limestone and Dolomite Mines Labour Welfare Fund Act, 1972; The Iron
Ore Mines, Manganese Ore Mines and Chrome Ore Mines Labour Welfare Fund Act, 1976; The Beedi Workers Welfare Fund Act, 1976; and The Cine
Workers Welfare Fund Act,1981.
In addition to this, there are certain social-welfare imposts that are either borne only by the industry or by all consumers. These include National
Calamity Contingent Duty which levied on specified imports including mobile phones, Education Cess and secondary and Higher Education Cess,
both of which are levied as certain percentage of different indirect and direct taxes.
There are many more cess, some of which would certainly qualify for inclusion the larger CSR domain.
The obvious conclusion one can draw from this analysis is that the Central and State Governments, that collect both tax and non-tax revenue,
have failed to fulfill their Constitutional responsibility to meet the basic needs of the population and are menacingly targeting businesses as
conduits for societal welfare.