Provisions for Corporate Social Responsibility in Companies Act, 2013

CSR as a concept has attracted worldwide attention and acquired a new resonance in the global economy Heightened interest in CSR in recent years has stemmed from the advent of globalisation and international trade, which has reflected in increased business complexity and new demands for enhanced transparency and corporate citizenship. Moreover, while Governments have traditionally assumed the sole responsibility for the improvement of the living conditions of the population, society’s needs have exceeded the capabilities of Governments to fulfill them. In this context, the spotlight is increasingly turning to focus on the role of business in society and progressive companies are seeking to differentiate themselves through engagement in what is referred to as CSR. The Companies Act, 2013 has taken one step ahead and introduced mandatory provisions in the field of CSR. Though many believe that concerns on the new company law are manifold and it is a bold yet not beautiful step. For instance, India Inc is concerned that the cost of board performance evaluation may outweigh the benefits for many small companies in this regard. Also, it has concerns about the prospect of an over regulated regime and the attendant scourge of corruption. Given the advantages and concerns on the new regulations introduced by the new Companies Act, we all need to wait and watch once the companies start implementing the new provisions and therefore, the practical aspects and implications will be evaluated thereafter.