Committee to monitor implementation of CSR::General Circular No. 1 of 2015

The Ministry of Corporate Affairs vide General Circular No. 1 of 2015 has notified Constitution of a High Level Committee to suggest measures for monitoring the progress of implementation of CSR policies not only by the Corporates at their level but also for overall monitoring by the Government. The Terms of Reference of this

Committee includes the following amongst others:

1. Recommending suitable methodologies for monitoring compliance of CSR provisions by the Companies;

2. Suggesting measures to be recommended by the Government to the Companies for monitoring and evaluating CSR initiatives;

3. Identifying strategies for monitoring and evaluating CSR initiatives through expert agencies and facilitating adequate feedback to the Government with respect to efficacy of CSR spend compliance and quality of compliance by the Corporates.

This development and its timing indicate the Government's seriousness with respect to implementation of CSR provisions in letter and in spirit. Although second proviso to Section 135(5) of the Companies Act, 2013 provides for "comply or explain" mechanism, but mere explanation may not go down well with the regulators. There is a need for professionals and corporates to take CSR compliance seriously.