Sunday, 6 March 2016

Suggestions for the Improvement of Corporate Social Responsibility (CSR) in India


·         Under the Companies Act – 2013, a company can only be penalized for not filing of details regarding CSR, but no penal action for no-performance.  Hence, there should be a clarification for penal action.

  • Creating awareness among the general public in CSR activities and improving communication is very important between the companies involved in CSR and the general public at the grassroots.
·         There is a need for capacity building of the local non-governmental organizations as there is serious dearth of trained and efficient organizations that can effectively contribute to the ongoing CSR activities initiated by companies and to ensure successful implementation of CSR.

  • There is a need for improving transparency on the part of the small companies as they do not make adequate efforts to disclose information on their programmes, audit issues, impact assessment and utilization of funds, which is a key to the success of any CSR initiative.

  • Broad perception towards CSR initiatives is essential, as non-governmental organizations and Government agencies usually possess a narrow outlook towards the CSR initiatives of companies, often defining CSR initiatives more as donor-driven.

  • Clear cut statutory guidelines or policy directives are required to give a definitive direction to CSR initiatives of the companies.

  • Consensus amongst implementing agencies regarding CSR projects is the need of the hour, because lack of consensus often results in duplication of activities by corporate houses in areas of their intervention.

  • As the act does not provide any guidance on what constitutes acceptable reasons for which a company may avoid spending 2 % on CSR, hence it should be clarified.

  • The companies in their CSR activities should give more preference for education, environmental issues, poverty elevation programmes, employment generation, roads and power etc.

  • In order to move from theory to concrete action, many obstacles need to be overcome. A key challenge facing business is the need for more reliable indicators of progress in the field of CSR, along with the dissemination of CSR strategies.

  • No clear cut regulatory framework regarding also acts as a hindrance in implementing CSR. It is found that the degree of CSR activities of companies should depend upon their business size and profile. In other words, the bigger the company, the bigger is its CSR program.

  • Lack of transparency is another issue which needs focus. This is mainly due to the fact that there is little or no knowledge about CSR within the local communities since no sincere efforts have been made to create awareness about CSR and win the confidence of local communities.

  • There is a need to increase the understanding and active participation of business in equitable social development as an integral part of good business practice.

  • All the draw backs of the Companies Act, 2013 to be addressed seriously without further delay.

  • “Welfare Model” should be adopted for CSR in our country with the ultimate goal of public welfare With Equal Social Justice”.

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