The new CSR rules and their impact on corporates

Jul 10, 2014

The Indian School of Business (ISB) hosted Dr Bhaskar Chatterjee, Director General, Indian Institute of Corporate Affairs (IICA) and Rakesh Bharti Mittal, Vice Chairman, Bharti Enterprises, on 9 July 2014, at its Mohali campus.

Dr Chatterjee interacted with ISB students and various industry representatives about - “The CSR Imperative – How does it impact us?” The talk session was chaired by Rakesh Bharti Mittal who is also the Chairman of the CII’s Development Initiative Council. The talk was organized as a part of the Bharti Institute of Public Policy's (BIPP) distinguished speaker series.

Various aspects of the Companies Act 2013 and the subsequent notification of the Corporate Social Responsibility (CSR) Rules were discussed during the session. Dr Chatterjee threw light on the companies that are covered under the new rules and how they are gearing up to align their CSR policies with the new rules.

“There are approximately 11 lakh registered companies in India today and only 14,500 companies out of the 11 lakh come under the ambit of the new CSR rules, which mandate a spend of two per cent of the total revenues of the companies towards CSR,” said Chatterjee. Adding further, “The new legislation will imply that the list of the CSR activities undertaken by the companies are put up in the public domain and that the corporates reveal the sum spent on the CSR activities. The new CSR legislation has been formulated to bring together the triad of government, corporates and implementing agencies.”
The Companies Act is a tool that has to be viewed as a fine piece of legislation and, as such therefore, an opportunity to create new vistas in the sector.  Importantly, what we do in the first year, and how we do it, will set a precedent for the years to come. The ISB will actively work to create an atmosphere wherein ideas about the new CSR rules, implementation issues, challenges and opportunities can be discussed and exchanged in a free and safe, academic environment.

Expressing his views, Rakesh Bharti Mittal said, “The attitude towards the CSR needs to change across the country. Section 135 of the Companies Act, which talks about CSR pushes us to do things which we forget to do and lend a helping hand to those in need and make a difference.”

The ISB’s students and other members of the audience asked questions about the impact of the new CSR rules and how management institutions can work together with the corporate sector for the betterment of the society at large.