Make CSR effective

Deferment of expense beyond a year can't be allowed

The recent data showing that India Inc has not been spending as much on corporate social responsibility (CSR) as mandated by law underlines the conceptual flaws in the statutory provision that came into effect from the financial year 2014-15. Section 135 of the Companies Act stipulates that companies with a net worth of Rs 5 billion, or turnover of Rs 10 billion or net profit of Rs 50 million must spend 2 per cent of net profits on such programmes. Although the law has a “pay or explain” provision, it has the potential to expand the scope for harassment by