With completion of a year for enactment of new Companies Act and notification of rules for Corporate Social Responsibility (CSR) spending, a lot of action is expected on the grounds in the current fiscal.
In an interview, Dr Bhaskar Chatterjee, director general and CEO of Indian Institute of Corporate Affairs, Ministry of Corporate Affairs, explains how corporates and NGOs are serious on this issue.
Has the ministry been able to remove doubts raised by companies to implement CSR activities under section 135 of the new Companies Act, 2013 and rules therein?
Yes of course. The Act and the rules provide platform for companies to showcase their CSR activities, do it in an organised way and then be able to strategically think through the implementation.
Now it has become something that people, who do off and on, can now be regularly monitored that comes on from the finest minds of the company sitting on the board room and now apply their minds. So it gives a great deal of new focus.New energy, new innovation all of this come through by CSR thinking.
When the results will be visible?
The results of CSR will actually come before the public domain from around September of this year when most of the audited results of the companies would come and we would get a grip as to what has happened in 2014-15. That was the first year of the Act. Corporates had a lot of questions.
Whenever something new comes a new shoe does pinch. It took a while for companies to acclimatise themselves to new regulations but I think 2015-16 will be what I called the traction year. This year the rubber will bite on the road.
How companies are prepared to implement CSR activities as the ministry data shows that nearly 16,000 companies are expected to spend over Rs 15,000 crore in the coming years?
People will have a new vision new direction. I think the corporate India has now made up its mind that the best thing to do is to do it well. Now the Act, rules are in place and it is time to stop asking anymore questions but to get on with the game.
And they will do it not because they will have to but because they want to and the attitude of the government and the Ministry of Corporate Affairs is to create an enabling environment to allow corporates to bring their special energy, efficiencies into the system.
How companies can rope in NGOs in the effective implementation of CSR activities?
I would say that it is very important for NGOs as they are the implementing agencies. They have to step up to the plate. They have to show that the opportunity has come up to them after so many years, let us do, let us deliver, let us show and prove to the country that we can really have impact on the ground.
Is government contemplating imposition of penalty clause for noncompliance?
The government and the Ministry of Corporate Affairs are quite serious to create an enabling environment. Our idea is not to get into the Inspector Raj. Our idea is to give corporates and NGOs a real chance to do good on the ground.
Is government contemplating giving a re-look at rules with regard to spending up to 5% of their total CSR funds in building CSR capacities of their own personnel or those of implementing agencies?
At this point there is no policy decision on that. It is one of our concerns and if there is a problem we will look into it. At this point of time there is nothing on the plate.
This article was taken from here.