Indian Companies may not get any tax sops for spending more as part of their corporate social responsibility (CSR) initiatives, an official in the government said on Thursday. The ministry of corporate affairs is unlikely to recommend any tax concessions for adoption of CSR initiatives for India Inc. This will be made amply clear when the ministry reviews existing corporate governance guidelines in next few months, said an Assocham release quoting R Bandyopadhyay, secretary in the ministry of corporate affairs. Interestingly, corporate affairs minister Salman Khurshid had earlier said that companies may be provided ‘fiscal incentives’ for their greater participation in CSR related work.
Mr Bandyopadhyay said his ministry would like corporates to adopt CSR as a part of their corporate culture and that such a culture could not be developed with reward of incentives.
The government would monitor the CSR initiatives of the industry, which has to voluntarily adopt CSR, for a year, said Mr Bandyopadhyay. He added that in case companies failed to take voluntary initiatives, the government in consultation with the Planning Commission will consider making CSR spending a ‘mandatory exercise’.
The review of existing CSR guidelines would happen in consultation with all concerned. The ministry would invite suggestions and criticism in the new guidelines, likely to be unveiled in next few months, said Mr Bandyopadhyay.
He, however, said that the guidelines will not be harsher and the government will do its best to make them enlightened to ensure their wider acceptance by the industry.
Planning Commission member Arun Maira said industry associations like Assocham ought to discipline its member and constituents for adoption of CSR initiatives as intended by government. The industry associations should thereafter, suspend the membership of their members in case they fail to implement the CSR guidelines as desired and directed by the government, said Mr Maira.