Greetings and best wishes for a Happy Holi !!!.
The year 2014 will be remembered in the history of Corporate India as the year in which mandatory CSR provision along with the new Companies Act 2013 coming to effect from, 1st April, 2014. The Rules to govern Section 135 and Schedule VII of the Companies Act 2013, dealing in mandatory CSR provisions has also been released few days back.
Corporate India is gearing up to the demands of the new companies act, specifically the CSR provision demanding to set up CSR committee of the board consisting of three or more directors, out of which at least one director shall be an independent director , decide CSR policy , Decide CSR projects, Decide implementing partners etc. The initial process of setting up of the CSR foundation in the companies is going to be tough, specifically for those companies, who do not have a history of doing CSR.
However, the CSR Rules just released lists a series of CSR projects to be considered as CSR under the law and accepted by the government for funding of the CSR budget. As per the rules, governing Schedule VII of the Companies Act, 2013, the projects to be considered CSR under the law include :
(a) Eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water
(b) Promoting gender equality, empowering women, setting up homes and hostels for women and orphans, setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups
(c) Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water
(d) Promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently abled and livelihood enhancement projects
(e) Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts
(f) Measures for the benefit of armed forces veterans, war widows and their dependents
(g) Training to promote rural sports, nationally recognised sports, Paralympic sports and Olympic sports
(h) Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government
(i) Rural development projects
(j) Contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central government for socio-economic development and relief and welfare of the scheduled casts, the scheduled tribes, other backward classes, minorities and women
The companies spending their own CSR budget will have to select projects out of the above list. This, restricts the freedom of the board of a company at a micro level and Corporate India at the macro level, to innovate for finding creative solutions to development challenges, which may or may not fall under the list , it may indirectly impact the development areas listed in the rules.
This rule of limiting the freedom of the board limits the opportunity of inviting and utilizing the creative potentials of corporate boards, which is the real asset for Indian Development Domain, far more potent than the combined CSR budget, estimated to be around 20,000 crores. The CSR laws could have ideally invited corporate India to design and implement creative projects to positively influence the development of the country, which are generally not possible within the programme.
Corporate CSR could have been an R&D laboratory for creative solutions supplementing Government schemes. The successful corporate CSR models could have been scaled up, replicated and / or converted in to full scale government programmes.
However, let’s welcome and accept the rules as the first stage of the process of change and let corporate India get acquitted with the CSR processes.
Best wishes to Corporate India, in its new role as CSR oriented company.
Hope you will enjoy reading this issue with a cover story on, SYNGENTA, a global major with Swiss Origin active in India in the domain of Agriculture Productivity , working with a mission of actualising plant potential. This issue also carries the Interview of, Arun Maira Member Planning Commission, speaking on CSR .
Please write to me your feedback and suggestions. You may also log on to www.csrvision.in, our web portal, which is loaded with plethora of information.
Prof. Ranjan Mohapatra