Corporate Affairs Minister Sachin Pilot today clarified that there will be no pressure from the government on what the companies should do and the CSR initiative aims to bring communities, NGOs and corporates together to make a difference for the society.
CSR committee of the company's board will have the final say on what projects come under CSR initiative and companies will have to disclose their projects and CSR spend on their websites.
CSR law is just giving a structured format to whatever the companies have been doing on the CSR front over the last few years, said Sachin Pilot during a Google Hangout today.
However, the minister did not give a time line as to when the rules will be formulated.
On the other hand, he said the government is planning on creating a data of NGO projects across the country that are in dire need of funding and can be tapped into by corporate India as part of their CSR initiative. Pilot also plans on roping in district collectors for the same and data on all such projects shall be available on the government's website.
11. 35 am: Rakesh Bharti Mittal expresses concerns on CSR rules
Rakesh Bharti Mittal of Bharti Enterprises said that the CSRrules may be very strict, and it should say that corporates can spend the money wherever we want to."Rules to localise CSR projects is restrictive," he said.
Mittal also expressed concern on the fact that board of directors and foundation trustees need to be different.
Replying to Bharti Mittal, Pilot said, "one director has to be independent on board. Who delivers the money or what is the platform is not important, but as long as its being delivered. We will take your suggestions into account."
11. 30 am: Are corporates here only to make money, asks Pilot
Aditya Puri of HDFC Bank said he doesn't have concerns with CSR mandate as long as it leads to community development and social responsibility.
Sachin Pilot said that the idea is that the corporates are here not to only make money but also to spread goodwill. "How can we have a factory making thousands of crores, while the children living around it are malnourished?," he said. Pilot also said that "time will tell whether CSR will be a success or fall flat on its face."
11. 25 am: Govt needs a climate change for better functioning, says Anand Mahindra
Anand Mahindra, CMD, Mahindra & Mahindra said that the idea of CSR may be passe but it is definitely a good thought. "Making CSR mandatory is the right initiative to drive positive change in the community," he said.
Mahindra asked Pilot how one can include the concept of share value in CSR agenda. To which, Pilot said, "We have put in several checks and balances to make Companies Bill transparent.It will be only be successful if all of us work together."
Pilot also said that governmentis not the lord and master of every decision companies make. "CSR committee on board of company will decide which project is right or wrong, not the government or me," he said.
11. 20 am: No political interference, promises Pilot
When asked about the misuse of CSR by political parties, Pilot said, "Don't be cynical about misuse of CSR, there will be no political interference and I can guarantee that."
11. 15 am: CSR not just confined to community services
Pilot also pointed out that capacity building, training, workshops are also possible as CSR initiative. "CSR not confined to just community services, there are a billion things cos can undertake as long as CSR committee approves it," he said.
11. 05 am: No Inspector Raj in new Companies Bill, says Pilot
Not every company will qualify for CSR, but the companies which do we want it to be transparent, says Sachin Pilot. Pilot also said that there will no be no Inspector Raj in implementing CSR, but it will be left to the consciousness of the companies. "Self reporting, self disclosures will be made possible through New Companies bill," he added.
10. 50 am: Sachin pilot to discuss CSR with Anand Mahindra, Aditya Puri
To deliberate on the concept of corporate social responsibility in the new Companies Bill, Corporate Affairs Minister Sachin Pilot will take questions on the topic from netizens on Google Hangout on Wednesday.
Through Google Hangout, a multi-person online video chat facility, Pilot would discuss the Corporate Social Responsibility (CSR) aspects of the new Companies Bill.
"The Hangout will have many participants including Anand Mahindra (CMD, Mahindra & Mahindra), Aditya Puri (MD, HDFC Bank), Rakesh Bharti Mittal (Vice Chairman & MD, Bharti Enterprises), social entrepreneurs, NGOs and students from IIM-Bangalore, among others," an official release said today.
Pilot would be joining the likes of US President Barack Obama, finance minister P Chidambaram, Planning Commission deputy chairman Montek Singh Ahluwalia, Gujarat chief minister Narendra Modi, and many other prominent personalities who have used the Google Hangout platform to reach out to people.
Under Clause 135 of the new Companies Bill, approved by Parliament on August 8, certain class of companies have to shell out two per cent of three-year average annual profit towards CSR activities.
The norms would be applicable for companies having either net worth of Rs. 500 crore or more; turnover of Rs. 1,000 crore or more; or net profit of Rs. 5 crore or more.
With inputs from PTI