President Ram Nath Kovind presented the National Corporate Social Responsibility Awards (NCSRA) in New Delhi on October 29. The NCSRA has been instituted by the ministry of corporate affairs to recognise outstanding contribution in the field of corporate social responsibility (CSR).

Kovind said that broadly, CSR initiatives have been aligned with national priorities such as public health, education, livelihoods, water conservation, sanitation and natural resource management. He expressed hope that innovative solutions to persisting development challenges will emerge from CSR activities.

From now onwards, National CSR awards would be conferred every year on October 2.

Importance of CSR

The importance of inclusive growth is widely recognised as an essential part of India’s quest for development. It reiterates the firm commitment to include those sections of the society in the growth process, which had hitherto remained excluded from the mainstream of development.

In line with this national endeavor, CSR was conceived as an instrument for integrating social, environmental and human development concerns in the entire value chain of corporate business. The ministry of corporate affairs had issued Voluntary Guidelines on Corporate Social Responsibility, 2009 as a first step towards mainstreaming the concept of business responsibilities.

This was further refined subsequently, as National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business, 2011.

The National Voluntary Guidelines (NVGs) is essentially a set of nine principles that offer Indian businesses an understanding and approach to inculcate responsible business conduct.

One of the principles - inclusive growth and equitable development - focuses on encouraging business action on national development priorities, including community development initiatives and strategic CSR based on the shared value concept. This principle of NVG was subsequently translated into a mandatory provision of CSR in Section 135 of the Companies Act 2013.

The CSR concept in India is governed by Section 135 of the Companies Act, 2013, and rules made thereunder wherein the criteria has been provided for assessing the CSR eligibility of a company, implementation and reporting of their CSR policies.

Under the Act, companies earning a profit of more than Rs 5 crore, turnover of Rs 100 crore or net worth of more than Rs 500 crore are required to shell out at least 2 per cent of their three-year annual average net profit towards CSR activities.

India having the most elaborated CSR mechanism and implementation strategy has started its journey to set a benchmark in attaining sustainability goals and stakeholder activism in nation building.

The CSR ambit is getting bigger and for upcoming years it would turn as a unique knowledge base for analysing and achieving sustainability goals as among various large economies India is a country that has assured by mandating CSR through its legislative action.

The ministry has instituted National CSR Award (NCSRA) to recognise CSR for inclusive growth and sustainable development. The award seeks to recognise the companies that have made a transformative impact on society.

Amendments in the law

Parliament on July 30 cleared amendments to the companies law to tighten norms pertaining to CSR spending.

A key change in the Bill pertains to CSR spending, wherein companies would have to mandatorily keep unspent money into a special account.

According to Finance Minister Nirmala Sitharaman, India has become the first country to make CSR spending mandatory through a law. Section 135 of the Act was being amended to provide for specific penal provision in case of non-compliance of CSR provisions.

The companies will have one year to firm up the CSR proposal and another three years to spend the funds.

Manorama Yearbook app is now available on Google Play Store and iOS App Store