Recommendations of the High Level Committee on CSR

While there are assurances received from the government of India that it will not criminalize CSR related violations, the Ministry of Corporate Affairs (MCA) has also uploaded the Report of the High Level Committee on CSR at: http://www.mca.gov.in/Ministry/pdf/CSRHLC_13092019.pdf

The Report of the High-Level Committee on CSR was presented to the Finance and Corporate Affairs Minister, Ms. Nirmala Sitharaman by Injeti Srinivas, Secretary (Corporate Affairs) on Tuesday 13th August 2019.

The committee has made several important recommendations with regard to Corporate Social Responsibility.

Key recommendations

  • Allow investment of CSR funds in Social Benefit Bonds;
  • Implementing agencies (NGOs) should be treated as partners and not service providers, so that the issue of indirect tax applicable to them (GST) can be addressed;
  • Allow unspent balance of CSR funds to be carried forward for three to five years;
  • Violation of CSR compliance should be made a civil offence and it should be shifted to a penalty regime;
  • The amount of penalty could be two to three times the amount not spent but there should not be any imprisonment for defaulting on CSR compliance;
  • Aligning Schedule VII (which provides a framework for CSR activities) of the Indian Companies Act 2013 with Sustainable Development Goals (SDG);
  • CSR expenditure should be made tax-deductible;
  • Balancing local area preferences with national priorities;
  • Impact assessment studies for CSR obligation of INR 5 Crore or more;
  • Government should not treat CSR as a means to resource gap-funding for government schemes;
  • CSR activities allowed under current law, such as contribution towards the Prime Minister’s National Relief Fund or any such fund of Central Government should be discontinued;
  • Companies with CSR amount below INR 50 lakhs should be exempted from forming a CSR committee;
  • Reporting on CSR should be strengthened, and it should be brought under the purview of statutory financial audit.

The High Level Committee on CSR

The High Level Committee on CSR was constituted in October, 2018 under the Chairmanship of Secretary (Corporate Affairs) to review the existing CSR framework and make recommendations on strengthening the CSR ecosystem, including monitoring implementation and evaluation of outcomes. 

The Members of the Committee included Shri Sameer Sharma, DG & CEO, Indian Institute of Corporate Affairs, Dr. A.K. Mittal, former CMD, NBCC, Shri N. Chandrasekaran, Chairman, Tata Sons, Shri Amit Chandra, MD, Bain Capital Private Equity, Shri B.S. Narasimha, former Addl. Solicitor General of India, Shri Rajeev Luthra, Founder & MD, Luthra and Luthra Law Office, Smt. Shobana Kamineni,  Executive Vice Chairperson, Apollo,    Prof. Anil Gupta, Founder, Honey Bee Network and Professor, IIM, Ahmedabad, Dr. Narinder Dhruv Batra, President, Indian Olympic Association, Shri S. Santhanakrishnan. Chartered Accountant, and Shri Mathew Cherian, CEO, Helpage India.  Shri Gyaneshwar Kumar Singh, Joint Secretary, Ministry of Corporate Affairs, was the Member and Convener.

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