Criminal proceedings for economic offences sets a bad precedent: Experts

Companies Act amendment to include penal provisions for CSR violations is seen as part of a larger trend of criminalising economic offences rather than going for civil proceedings

Late last month, while speaking in the Rajya Sabha, Finance Minister Nirmala Sitharaman defended the amendments to the Companies Act, saying legitimate profit earning could not be devoid of social responsibility, and that companies could not get away with not meeting their corporate social responsibility (CSR).

According to the amendments to the Companies Act, violation of CSR norms will now attract fines ranging from Rs 50,000 to Rs 25 lakh, from both defaulting companies and officers, and officers will also be liable for an imprisonment of up to three years.

“It was easy for people to interpret that either we