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The Indian government has invited all companies to provide reports on their CSR activities directly to its corporate affairs ministry.
The ministry has created an area on its website where companies can upload their reports for examination. An official said the ministry had asked businesses to share their reports so that it can gather data to help it with its continuing review of corporate responsibility in India.
The move has been seen in some quarters as a possible precursor to a law requiring mandatory CSR reporting for large companies, although the government has played down that option.
However, senior ministers are known to be disappointed at what they see as slow progress on corporate responsibility – and social reporting – and have again threatened to introduce a law ordering companies to spend a prescribed percentage of their profits or revenues on CSR projects.
Such a prospect appeared a step closer last month when the Orissa state government announced it would introduce a local law requiring businesses to invest a proportion of their profits in social programmes.
No amount has yet been stated, but some observers expect it to be between five and ten per cent. Orissa chief minister Naveen Patnaik has asked the state revenue department to draft the law and accompanying regulations and has suggested he would like to see more corporate money spent on areas such as infrastructure development, education and health.
Orissa may have been encouraged to adopt this policy by recent draft national legislation requiring mining companies in India to provide local state authorities with a ‘CSR document’ stating levels of annual expenditure for ‘socio-economic activities in and around the mine area for the benefit of the host population’.
The idea of mandatory spending levels has largely been opposed by Indian business interests, including the leading trade body Ficci, which has been helping the government with its review.
Jyoti Vij, Ficci’s assistant secretary-general, said mandatory spending would largely amount to ‘window dressing’ and was unlikely to achieve much.
Erin Lyon, a consultant at the CSR Asia consultancy, said she was sceptical about the benefits of any law on spending levels.‘The desire to encourage companies to undertake CSR is obviously a good one, but there are warning signs emerging that India is heading the same way that Indonesia did a few years ago when it created a CSR law that effectively became a philanthropy tax,’ she said.
‘It never had the support of business and to this day doesn’t have any implementing legislation. CSR is about how you make the money, not how you spend a percentage of the profits.’
It is still unclear how serious the Indian government is about such legislation, but one idea being floated by the review that appears unlikely to become law is tax relief for companies that lead the way on corporate responsibility. The government is now believed to be against this option on the grounds that firms should not need incentives to act responsibly.
The ministry has created an area on its website where companies can upload their reports for examination. An official said the ministry had asked businesses to share their reports so that it can gather data to help it with its continuing review of corporate responsibility in India.
The move has been seen in some quarters as a possible precursor to a law requiring mandatory CSR reporting for large companies, although the government has played down that option.
However, senior ministers are known to be disappointed at what they see as slow progress on corporate responsibility – and social reporting – and have again threatened to introduce a law ordering companies to spend a prescribed percentage of their profits or revenues on CSR projects.
Such a prospect appeared a step closer last month when the Orissa state government announced it would introduce a local law requiring businesses to invest a proportion of their profits in social programmes.
No amount has yet been stated, but some observers expect it to be between five and ten per cent. Orissa chief minister Naveen Patnaik has asked the state revenue department to draft the law and accompanying regulations and has suggested he would like to see more corporate money spent on areas such as infrastructure development, education and health.
Orissa may have been encouraged to adopt this policy by recent draft national legislation requiring mining companies in India to provide local state authorities with a ‘CSR document’ stating levels of annual expenditure for ‘socio-economic activities in and around the mine area for the benefit of the host population’.
The idea of mandatory spending levels has largely been opposed by Indian business interests, including the leading trade body Ficci, which has been helping the government with its review.
Jyoti Vij, Ficci’s assistant secretary-general, said mandatory spending would largely amount to ‘window dressing’ and was unlikely to achieve much.
Erin Lyon, a consultant at the CSR Asia consultancy, said she was sceptical about the benefits of any law on spending levels.‘The desire to encourage companies to undertake CSR is obviously a good one, but there are warning signs emerging that India is heading the same way that Indonesia did a few years ago when it created a CSR law that effectively became a philanthropy tax,’ she said.
‘It never had the support of business and to this day doesn’t have any implementing legislation. CSR is about how you make the money, not how you spend a percentage of the profits.’
It is still unclear how serious the Indian government is about such legislation, but one idea being floated by the review that appears unlikely to become law is tax relief for companies that lead the way on corporate responsibility. The government is now believed to be against this option on the grounds that firms should not need incentives to act responsibly.
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