CORPORATE SOCIAL RESPONSIBILITY A TAX OR AN OPPORTUNITY.

-PROF SHILPA BHAGTANI (M.COM,UGC-NET)

 Rajya Sabha on Thursday 8th Aug 2013 passed

the companies bill, which seeks to improve Transparency & Accountability in the Companies, encourages self Regulation & makes contribution of 2 per cent profits towards CSR, among other changes.

 As far as the Mandatory CSR clause is

concerned the Stipulated 2% spend would be mandatory for Companies with a Net Worth of more than 500 crores or a turnover of more than one thousand crore or net profit of more than Rs 5 crores

 Companies have to spend at least 2 per cent

of its average net profit during 3 preceding years on corporate social Responsibility activities.

 It is Expected that 18000 crores can come in

the form of 2 per cent profits i.e Coal India 595 crores Tata Motors 170 Crores ITC 82 Crores

 Many persons have a view that it should not

be mandatory as company takes loan it should be with the consent of everyone & donation is to be done Voluntarily we Cant force anyone to donate. But as it has become the Law we Cant give our views & ask others Opinion on Compulsion of CSR

 INDIA is the

st 1 Country

to bring Law of CSR

 Next Q which arises is about usage of funds.

We have to make National Program i.e. National Quality Fund. It should cover the areas of ; Scholarship for students National Sanitation Fund Malnutrition Poverty Alleviation Programmes

 Program should be Universally Applicable &

Strength of Company is to provide Creative Solution for CSR

 Today India is back in Evolution, CSR is

started from beginning i.e. initially we use to write cheques, give 2 % profits etc

 According to Havard University Definition of

CSR is CSR is not about how you spend your profits but how you make your money. It also considers the Working Atmosphere of the company Eg Cadbury

 Companies instead of Turning a Blind Eye

should take into A/c its proper spending & utilisation of funds. Customers & Employees will feel Delighted due to transparency which in turn will increase its profits leading to higher voluntary contribution by them

 Government should give Broad Guidelines as

Firm guidelines will lead to over spending of funds in the same place which will result in manipulations. Eg Kerala govt spends too much money on Primary Education but problem is of higher education where amount is not spent.

 Companies have to Identify NGOs & increase

their strength & Opportunities being the daily Matter for them. Companies must create Transparency, follow Business Ethics & give crowd source of ideas. Companies can take help from other organisation but they have to Drive Themselves.

 Since it has become a law we have to change

the language, work in a different manner & bring a sound clause which would benefit Companies as well as society.

 There is Also a Probation of Misuse of Funds

but: We have to trust on private Companies Misuse will be there, govt will take steps to reduce it Any kind of misuse will be displayed in media due to which Companies may have to face negative consequences.

FINDINGS
Negative aspect :Though CSR has become a

Law but then too many misstatements & manipulations are bound to occur. Positive aspect :If there is Transparency Corporate Governance & proper use of CSR we are going to benefit a lot from little also Govt has not stated any fine on non payment of CSR & has only asked to disclose the reasons of it.

Conclusion
If Companies view CSR as tax then lot of

Manipulations are about to take place i.e by converting black money into white, showing fake transactions. On the other hand if they view as an Opportunity we can make a National Mission to solve all problems of our country & make India Sone ki Chidiya