Finance Minister Nirmala Sitharaman on Friday announced that corporate social liability (CSR) violations would not be treated as criminal offences and would instead be a civil liability, in a move welcomed by India Inc.
“CSR spend and criminal proceedings on that was a surprise to many when it was announced.
“Taking it back is a welcome move. It will allow the corporations to think and employ their CSR funds in an effective way without fear. This step has certainly given a boost to the morale of corporate India,” Ashish Chauhan MD & CEO, BSE, told The Hindu.
“[The] Ministry of Corporate Affairs will review the sections in Companies Act on CSR violations,” said Ms. Sitharaman in her presentation.
When asked for comments, Abhishek Lodha, MD, Lodha Group, said, “Job creators (business) will appreciate the steps taken on CSR and other measures. While the economy will take time to recover, the process will start from today. The important steps announced today will boost job creation and revive economic sentiment.”
The government has provided companies, through revised orders, the time for completing on-going projects towards fulfil their CSR obligations.
Mukund Rajan, chairman, ECube Investment Advisors, believes these are welcome steps to restore the confidence in the economy.
Addressing risk
“With the fiscal space available to the government being limited, the private sector needs to be encouraged.
“The willingness to address the risk and cost of doing business, as is reflected with the decision on CSR issue, in an important gesture in this context,” he said.
Mahindra Group chairman Anand Mahindra tweeted that a willingness to relook at policies was a display of strength, not weakness.
“Today’s press conference by Finance Minister Nirmala Sitharaman will, I hope, mark the start of a new, interactive and interdependent relationship between the government and business,” Mr. Mahindra tweeted.
Article Credit: thehindu