Ministry of Corporate Affairs Current Affairs

Government sets up committee to review the enforcement of CSR provisions

The Ministry of Corporate Affairs (MCA) has constituted 12-member committee to review enforcement of Corporate Social Responsibility (CSR) provisions under Companies Act, 2013. It will be headed by Regional Director (Western Region) Manmohan Juneja. Besides, there will be two sub-committees viz. legal and technical that will go into various aspects in relation to compliance with CSR provisions.

Committee’s Terms of References

The committee will review functioning of CSR enforcement and recommend uniform approach for its enforcement. It will revisit guidelines for enforcement of CSR provisions and basis, including structure of Centralised Scrutiny and Prosecution Mechanism (CSPM).

It will also look at methodologies for monitoring of compliance by companies with CSR norms for having an effective CSPM. It will also revisit Schedule VII of Companies Act, 2013 pertaining to the board list of CSR activities that can be taken up under the Act on basis of references received from various stakeholders.

Background

Under Companies Act, 2013, certain class of profitable companies (entities) are required to shell out at least 2% of their three-year annual average net profit towards CSR activities. In case of non-compliance, these companies have to furnish reasons to Ministry of Corporate Affairs (MCA). In recent times, MCA has come across rising instances of non-compliance with CSR requirement. Last year, MCA had sought explanation from many companies for not complying with CSR norms. As per official data, 6,286 companies spent Rs. 4,719 crore towards various CSR activities in 2016-17, with total number of such projects taken up stood at 11,597.

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Government launches National CSR Data Portal & Corporate Data Portal

The Union Ministry of Corporate Affairs (MCA) has launched National CSR Data Portal & Corporate Data Portal for bringing accountability and transparency for corporate India.

The portals aim to provide easy accessibility to general public and also ensure high level of compliance. It will also help in institutionalising and consolidating the CSR activities.

National CSR Data Portal

The portal will capture information on Corporate Social Responsibility (CSR) activities carried out by eligible companies, filed on MCA21 registry in their financial statements. It will contain all filed information that can help to generate pre-defined reports with respect to expenditure across states, districts and development sectors.

It will also provide feedback on projects to be given by registered users. Moreover, the open access to data will help researchers and also improve quality of data filed by companies, as well as involve intended beneficiaries in giving valuable feedback to companies.

Corporate Data Portal

The portal aims at making all financial and non-financial information of companies available in user-friendly format to general public. It will also have facility to generate pre-defined reports and also customised reports. The portal will enable greater transparency and creation of tools for stronger Corporate Governance.

Significance

These portals are expected to bring 100% transparency in corporate governance by making public over 4-crore filings of nearly 1.2 million companies. They will also promote corporate transparency and accountability to public at large. They are also expected to become platforms for learning and sharing of ideas and information. They will also facilitate social audit of CSR projects and bring together CSR contributors, implementers and beneficiaries and align CSR activities with national development goals.

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