Topic: Issues relating to development and management of Social Sector/Services relating to Health, Education, Human Resources, corporate governance.
2) Discuss the effectiveness of the Corporate Social Responsibility (CSR) related amendments made to the Companies Act? Analyse the pros and cons of the same. (250 words)
Why this question:
Parliament on Tuesday cleared amendments to the companies’ law that will tighten norms pertaining to CSR spending for corporates, strengthen enforcement provisions and help unclog National Company Law Tribunal.
Key demand of the question:
The answer must evaluate the amendments made with respect to CSR in the companies act.
Discuss – This is an all-encompassing directive – you have to debate on paper by going through the details of the issues concerned by examining each one of them. You have to give reasons for both for and against arguments.
Structure of the answer:
Define what is CSR.
One has to discuss the salient features of the companies act and the key features pertaining to the CSR.
Explain the newly introduced provisions – provision wherein the unspent CSR amount would be transferred to an escrow account for three financial years. Subsequently, if the amount remains unspent then the same would be moved to funds specified in Scheduled VII of the Companies Act. Under the Act, certain class of profitable companies are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities etc.
Weigh the possible pros and cons and provide for your opinion.
Conclude with significance of such amendments and importance of CSR to the country.