Corporate social spend not to be mandatory: Govt

“There is no way government wants to mandate it. If we make it mandatory there can be thousand and one ways to bypass it,” Corporate Affairs Secretary D K Mittal said at a meeting organised by the Bombay Chamber of Commerce and Industry on CSR, here.

The government will come out with “forward looking” CSR spend guidelines, he said, adding, “It will be only directional and not mandatory. We want it to be flexible. But once the new norms are in, firms will have to disclose their CSR spends or non-spending.”

“Like elsewhere, we want the new companies bill to include the CSR code and we want the corporates to mandatorily disclose in their annual reports the codes which they adhere to or do not adhere to,” Mittal said.

The top bureaucrat's comments are diagonally opposite to the opinion expressed by corporate affairs minister Murli Deora who had favoured making the allocation of 2 percent of net profit for CSR mandatory.

To the question what difference guidelines would make if CSR was not going to be made mandatory, he said the new bill would make the whole process more transparent. The new companies bill would be tabled in the monsoon session.

The 2 per cent compulsory CSR spend proposal, mooted by Deora's predecessor Salman Khurshid, had sparked off an intense debate, with majority of corporates favouring voluntary CSR spend.

Mittal said the new companies bill will give directions towards CSR spends for companies but will not be “prescriptive.”

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