Changing Legal Landscape of CSR Reporting in India – MCA Form CSR 2: Furnishing CSR Report with Facts

Background

When the Corporate Social Responsibility (‘CSR’) concept was introduced in India in 2013, it was intended to be a voluntary exercise and corporates were expected to maximise their contributions for social causes to create a niche in the market with inherent benefit of effective brand building. However, in the past, it has been observed that the CSR funds were not being channelized in their true spirit by certain organisations and resultant abuse of the CSR provisions. The Government of India has been pushing Indian corporates to conduct their businesses with greater transparency, curtail abuse, reinforce governance and provide comprehensive reporting of their activities. Of late, a number of changes in the CSR provisions have been announced, as a result of which CSR has evolved from a voluntary and public-spirited approach to an obligatory drill for staying compliant.

Concluding remarks

The Form CSR-2 would be an effective tool for helping the authorities to integrate, analyse and investigate the CSR data so that improved and effective policies can be introduced in future. Furthermore, the amendment is expected to ensure that the CSR funds are spent in a righteous manner and the money unspent is not diverted for unintended purposes or back into the company’s assets. It is very important for Companies to comply with the said amendments with utmost care and diligence.