CSR INDIA


Companies’ Act 2013: A world leader in CSR legislation

The Companies’ Act 2013 and Section 135 within it are a culmination of many soul-searching and highly contested debates among those responsible for laying down the framework upon which section 135 was finally to rest. The first formal engagement of the corporate sector in India may have started with the CSR seminars in 1965-66, but it was in December 2009 that the first set of guidelines was introduced by the MCA, exhorting business entities to formulate CSR as an integral part of their overall business policy. This was followed by the release of the Department of Public Enterprises (DPE) Guidelines on 1st April 2010 - the first indicator of how seriously the social responsibility of corporate India was being viewed. These linked CSR and Sustainable Development to ‘actual spending’ and also ‘incentivized performance’ through monetary gains. 8th July 2011 saw the release of the NVGs – National Voluntary Guidelines – by the MCA. These focused on the process of ‘cradle-to-grave’ in the life cycle of products and services, and promoted responsible business through conscientious corporate governance. The NVGs were the first to link realities of Indian business, society and environment with global trends and good practices.

The process of responsible corporate governance through CSR was finally enshrined into law when the Companies Act 2013 was enacted by Indian Parliament in 2013- a clear indication of the government’s desire to formally involve the corporate sector in the development agenda of the country. The Bill was earlier passed by the Lok Sabha on 18th December 2012 and the Rajya Sabha on 8th August 2013. The Act was notified in the Gazette of India on 30th August 2013.

 

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