India Inc calls on Pilot to hold horses on CSR, seeks tax exemption for spends
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India Inc on Tuesday cautioned corporate affairs minister Sachin Pilot against any "interventionist" measures on corporate social responsibility spends. Corporate India said any CSR spend should be viewed from a group perspective, including trusts and foundations rather than individual companies within a group. The industry also sought 100% tax exemption on CSR expenditure made by them.
The minister differed on the proposal for listing group CSR activities under individual companies and sought more time to decide on the tax exemption issue. The ministry, Pilot said, was still fine-tuning CSR rules and penalties.
Sources said the industry also expressed opposition to any government-led special purpose vehicle to oversee CSR expenditure.
Their basic message: Companies have been spending on CSR activities and will continue to do so, but the government, in its enthusiasm, should not make it mandatory and start penalising them.
A public sector firm expressed concern that CSR could become useful for vested interests armed with Right to Information.
The industry broadly appreciated the initiative to seek its views, stating it was the first instance of such an interaction. Companies like Tata Steel, Vedanta Group, Wipro, Max Group and Raheja Developers along with members of industry chambers participated in the meeting.
Pilot called the meeting to seek the industry's views on the clause in the new Companies Bill which makes it mandatory for profitable government and private companies to allocate 2% of their average profits accrued in the preceding three financial years on CSR programmes.
Speaking to FE, Sunil Kant Munjal, joint managing director of Hero MotoCorp said: "The meeting was fruitful. We have conveyed to the minister that the industry has been doing CSR activities and do more in future. However, the government should ensure that it does not create an extreme situation where its role becomes interventionist".
Navin Raheja, chairman and managing director of Raheja Developers told FE that he pointed out that the government should not come out with any penal provisions whereby it starts punishing companies which it finds did not adhere to its definition of CSR.