Finally, the large and small corporates will have to spare some of their increasing profits for social work and benefits. Government may make it mandatory for India Inc to set aside 2 per cent of their average net profit as Corporate Social Responsibility (CSR) budget. The proposal had been mooted back in 2009 by the parliamentary Standing Committee in its recommendations on the Companies Bill 2009.
Though government thinks that even after keeping 2 per cent aside as a part of their share of CSR, the total contribution is too less, but a few corporates disagree to this compulsion.
Government’s priority is to ensure enactment of the new company law in the forthcoming session of Parliament. The new bill seeks to delegate greater responsibility to independent directors and provide more say to shareholders.
If at all the law is made mandatory, there will be uproar from a lot of corporates. The need of the hour is an efficient implication of the law and it should be made sure that no corporate giants have an escape.
It would be interesting to wait and see how generous the business giants can be.