A high level steering committee on Corporate Social Responsibility (CSR) headed by Injeti Srinivas, Corporate Affairs Secretary has recommended to make CSR expenditure tax-deductible and that non-compliance of CSR norms be treated as a civil offence.Key points:
i. Submission: The committee presented its recommendations to Finance Minister Nirmala Sitharaman.
ii. Other Key recommendation:
- provision to carry forward unspent CSR balance for 3 -5 years period.
- Compliance with Schedule 7 of the Companies Act (which underlines the kinds of activities for the qualification as CSR) with the United Nations Sustainable Development Goals(SDG).
- Balancing the local area preferences with national priorities, introducing impact assessment studies for CSR obligation of Rs 5 crore or more, and registration of implementation agencies on Ministry of Corporate Affairs(MCA) portal.
- Conducting a 3rd party assessment of major CSR projects and promoting social impact entities.
- Creation of CSR exchange portal to connect contributors, beneficiaries and agencies.
- CSR shouldn’t be treated as a means of resource gap funding for government schemes.
- Certain classes of high profit getting firms are required to spend at least 2% of their 3-year annual average net profit to CSR.
iii. The committee also recommends companies may be exempted from constituting a CSR committee, if its CSR prescribed amount below Rs 50 lakh.
iv. The report will provide a big relief to the firms ,which are worrying about the meeting stringent CSR norms & help adopting sustainable development goals , promotion of sports, welfare of senior citizens &differently-abled persons, disaster management and heritage protection.
v. Background: In October, 2018, the committee was formed with the members of N Chandrasekaran(chairman, Tata Sons), and Amit Chandra( managing director, Bain Capital Private Equity), among others.