This if accepted may come as a major relief to companies who are hassled about meeting stringent CSR norms or facing penalties announced recently by Finance Minister Nirmala Sitharaman. But the penalty issue has been resolved recently.
The committee recommendations aim to adopt sustainable development goals which would additionally include sports promotion, senior citizens' welfare, welfare of differently-abled persons, disaster management and heritage protection, said a statement by the Ministry of Corporate Affairs.
The other key points of the suggestions were balancing the local area preferences with national priorities, introducing impact assessment studies for CSR obligation of Rs five crore or more, and registration of implementation agencies on MCA portal.
Further, there were several other recommendations such as developing a CSR exchange portal to connect contributors, beneficiaries and agencies, promoting social impact companies, and third-party assessment of major CSR projects.
The committee has strongly opposed treating CSR as a means of resource gap funding for government schemes. Also, the committee discouraged passive contribution of CSR into different funds.
On Tuesday, Srinivas presented the report to Finance and Corporate Affairs Minister Nirmala Sitharaman.
The government-constituted panel has also suggested making CSR non-compliance a civil offence.
The panel highlighted that CSR expenditure should not be treated as a means of resource gap funding for government schemes.
Under the Companies Act, 2013, certain classes of profitable entities are required to spend at least two per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) in a particular financial year.
Earlier there was a fear among corporates after the government brought in a provision of jail up to three years for not complying with the revised CSR norms. However, a few days later Sitharaman said that there will be no penalty for failing to meet the revised CSR norms.
This was after the government met representatives from different sectors of the economy in the last few days who convinced the government that amid a slowdown in demand and production, such a step would have been regressive.
The committee has underlined that the CSR spending should be a board-driven process to provide innovative technology-based solutions for social problems.
It has also recommended that companies having CSR prescribed amount below Rs 50 lakh may be exempted from constituting a CSR committee. The recommendations also state that the violation of CSR compliance may be made a civil offence and shifted to the penalty regime.
( With inputs from IANS )