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Category: Laws

  • Why CSR should not be mapped to parliamentary constituencies

    Why CSR should not be mapped to parliamentary constituencies

    Naveen S Garewal

    In recent parliamentary sessions, a familiar pattern has emerged: Members of Parliament routinely seek granular details on Corporate Social Responsibility (CSR) spending within their Lok Sabha constituencies. Questions range from development works by specific sugar mills in Valmikinagar, Bihar, to targeted interventions in backward or Scheduled Caste-dominated areas of Shahjahanpur, Uttar Pradesh, and even proposals for district-level “CSR project banks” in Amroha to align with local needs in drinking water, sanitation, schools, and skills training.

    The Ministry of Corporate Affairs responds with consistent restraint: CSR expenditure according to parliamentary constituency is not maintained centrally. The framework under the Companies Act, 2013, remains disclosure-based and board-driven. Companies file annual details in the MCA21 registry, and aggregates — state-wise, district-wise, sector-wise, company-wise — are publicly accessible on www.csr.gov.in.

    The government issues no directives on where or how corporates should spend, nor does it track spending by political boundaries or specific communities. This position is not bureaucratic evasion; it is a deliberate design choice that deserves defence.

    The intent of Section 135 of the Companies Act, 2013, was never to create a parallel public funding stream under parliamentary oversight. CSR emerged as a statutory nudge for profitable companies to contribute to society, with boards — advised by CSR committees — deciding priorities based on business strategy, operational footprint, and Schedule VII activities.

    A key guiding principle is preference for local areas around operations, but this is advisory, not mandatory. The regime seeks to harness corporate resources for social good without turning CSR into government-directed allocation. Parliamentary constituencies are political constructs, redrawn periodically through delimitation exercises.

    They rarely align neatly with administrative units like districts or company operations. Imposing central tracking at this level would demand additional compliance burdens — mapping multi-site projects, verifying boundaries, auditing overlaps — on thousands of companies. The cost would outweigh benefits, especially when district-level data already enables scrutiny of local impacts. More critically, constituency-level granularity risks politicising CSR.

    Persistent questions from MPs reflect understandable constituency pressures: elected representatives want visible development in “their” areas. Yet formalising such tracking could foster expectations of informal quotas or invite lobbying, turning a corporate responsibility into an extension of electoral politics.

    Evidence already hints at distortions — higher CSR flows in election years or ruling party strongholds. Codifying constituency data might amplify these tendencies, undermining the board-driven ethos and inviting misuse.

    Transparency exists where it matters. The csr.gov.in portal offers robust, verifiable data: over Rs 4,000-5,000 crore annually from PSUs alone in recent years, spread across states and sectors. District-wise breakdowns allow MPs, civil society, and citizens to analyse flows and advocate for better alignment with local needs. If imbalances persist — say, in aspirational districts or SC/ST areas — the solution lies in incentives, guidelines, or voluntary campaigns, not central mandates that erode corporate autonomy.

    The government’s refusal to maintain constituency-wise data upholds a vital distinction: CSR supplements, but does not substitute, public expenditure or schemes like MPLADS. Politicising it further would blur lines between private philanthropy and state welfare, potentially deterring genuine corporate engagement.

    In an era when development rhetoric often outpaces outcomes, resisting micro-political oversight of CSR preserves its potential as flexible, innovative social investment. Parliamentarians would serve their constituents better by pushing companies directly, leveraging public data, or strengthening convergence with government programmes — rather than demanding a tracking system that the law never envisioned and good policy should avoid. include focus keyword in title and throughout the story

  • Eco Survey: Southern states lead green ease of doing biz

    Eco Survey: Southern states lead green ease of doing biz

    Ease of doing business got a major green upgrade in southern India, with Tamil Nadu, Kerala and Andhra Pradesh emerging as trailblazing models, according to the Economic Survey 2025-26.

    The pre-Budget document presents clear evidence that these states have dramatically improved ease of doing business by slashing environmental clearance timelines under the Business Reform Action Plan (BRAP) — while smartly weaving sustainability right into their industrial and economic strategies. This shows that faster approvals and stronger environmental protection can — and do — coexist.

    Kerala used BRAP 2024 to turbocharge ease of doing business through streamlined business registration, digitised land and tax records, and simplified environmental clearances. Simultaneously, the state accelerated renewable energy adoption, rolled out carbon-neutral gram panchayats and launched large-scale waterbody rejuvenation — delivering quicker business setup alongside meaningful ecological gains.

    Tamil Nadu strengthened its ease of doing business ranking with single-window clearances, fully digitised approval processes and progressive land reforms. It is aggressively promoting massive solar parks, district-level decarbonisation plans and statewide energy efficiency programmes.

    The Tamil Nadu Pollution Control Board maintains rigorous oversight of industrial effluent treatment and actively facilitates Common Effluent Treatment Plants (CETPs) for pollution-intensive clusters like tanneries and textiles, ensuring treated wastewater consistently meets strict discharge standards.

    Andhra Pradesh advanced ease of doing business under BRAP 2024 with single-window industrial clearances, online land registration and electronic environmental approvals. The state expanded its Online Consent Management & Monitoring System, allowing businesses to apply for consents digitally, track real-time progress and significantly reduce delays — while greatly improving transparency and coordination between industries and the Pollution Control Board.

    “Some evidence suggests that states streamlining processes to boost ease of doing business while embedding sustainability can cut delays, increase transparency and deliver better environmental outcomes at the same time,” the Survey notes.

    These pioneering and balanced efforts send a strong signal: enhancing ease of doing business no longer means compromising on green goals — it can actually reinforce renewable energy growth, tighter pollution controls and digital-first governance.

  • No proposal for centralised CSR monitoring platform: Govt

    No proposal for centralised CSR monitoring platform: Govt

    There is no proposal to create a centralised CSR monitoring platform for oversight and evaluation, Minister of State for Corporate Affairs Harsh Malhotra stated on Tuesday.

    In his written reply to the Rajya Sabha, the minister further disclosed that the government has penalised 30 companies with a total penalty of Rs 19.94 crore for non-compliance.

    “Whenever violation of CSR provisions is reported, action against such non-compliant companies is initiated as per provisions of the Act after due examination of records and following due process of law,” he added.

    As per the latest data, companies spent Rs 34,908.75 crore on CSR activities in the 2023-24 financial year, marking an increase from Rs 30,932.07 crore in the previous year.

    This underscores growing corporate commitment to social responsibility amid ongoing discussions on enhancing CSR monitoring platforms for transparency.

    All data related to CSR filed by companies in the MCA21 registry is available in the public domain and can be accessed at www.csr.gov.in.

    Stakeholders and researchers can leverage this portal to track compliance and impact without the need for a new centralised CSR monitoring platform.

  • Global CSR best practices for Indian firms to adopt now

    Global CSR best practices for Indian firms to adopt now

    By Eldee

    Indian Corporate Social Responsibility (CSR) stands at a crossroads. While mandatory spending under Section 135 of the Companies Act has mobilized over Rs 15,500 crore annually, the decline to 1.87% of net profit—a six-year low—signals that compliance isn’t enough. The answer lies abroad: global best practices that transform CSR from obligation to competitive advantage.

    As Indian firms eye international markets and global talent, adopting world-class CSR strategies isn’t optional—it’s imperative. Here’s the blueprint that’s revolutionizing corporate citizenship worldwide.

    Strategic Alignment: Making CSR Core, Not Peripheral

    The first global CSR best practice Indian firms must embrace: integrate CSR with core business strategy, not treat it as a separate charitable wing.

    Technology giants like Microsoft don’t just donate computers—they build digital literacy programs that create future customers and skilled workers. Pharmaceutical companies like Novartis don’t simply fund clinics—they develop healthcare infrastructure that strengthens entire supply chain ecosystems.

    Indian companies can mirror this approach. Technology firms should champion digital literacy initiatives, healthcare companies prioritize public health systems, manufacturing units drive circular economy models. When Tata’s multi-year village development programs align industrial growth with community prosperity, they exemplify this integration—creating shared value, not one-way charity.

    Long-Term Impact Over Short-Term Optics

    Global leaders have abandoned the photo-opportunity approach. Instead of ribbon-cutting ceremonies, they commit to multi-year programs with measurable, lasting outcomes.

    Indian firms currently average project durations under 18 months. International best practice demands 3-5 year commitments minimum—time horizons that allow education programs to graduate students, healthcare initiatives to reduce disease burden, environmental projects to restore ecosystems.

    Unilever’s Sustainable Living Plan spans decades. Patagonia’s environmental commitments are generational. Indian corporations must shift from annual CSR budgets to sustained campaigns that compound impact over time, particularly in education, environmental restoration, and economic empowerment.

    Stakeholder Co-Creation: Community as Partner, Not Recipient

    Perhaps the most critical global best practice: genuine stakeholder engagement throughout the CSR lifecycle.

    Leading international corporations involve local communities, employees, customers, NGOs, and government bodies from initial design through implementation and evaluation. Communities aren’t beneficiaries—they’re co-creators.

    Indian CSR often suffers from top-down imposition: urban corporate offices deciding rural priorities without consultation. Global best practice demands listening tours, community needs assessments, participatory design workshops, and local advisory boards. When stakeholders shape programs, success rates multiply—needs are accurately addressed, cultural contexts respected, sustainability ensured.

    Collaboration Ecosystems: Leverage Expert Networks

    No corporation possesses all expertise needed for complex social challenges. Global leaders build collaboration ecosystems.

    They partner with specialized NGOs for on-ground execution, academic institutions for research and evaluation, government agencies for scale and policy alignment, other corporations for collective impact initiatives.

    Indian firms can dramatically enhance CSR effectiveness through strategic partnerships. Rather than building parallel systems, leverage existing NGO networks with decades of community relationships. Rather than proprietary programs, join industry coalitions addressing systemic issues—child nutrition, water conservation, skill development—where collective action produces exponential results.

    Innovation and Digital Integration: Technology as Force Multiplier

    Global CSR increasingly deploys cutting-edge technology for reach, efficiency, and impact measurement.

    Digital platforms extend education to remote villages through mobile learning. Telemedicine connects rural patients with specialist doctors. Blockchain ensures transparent fund tracking. AI analyzes program data to optimize interventions in real-time. IoT sensors monitor environmental restoration projects continuously.

    Indian firms, particularly in technology sectors, must leverage innovation for social good. The Ministry’s new web-based CSR-1 registration system effective July 2025 signals this direction—demanding digital tracking, transparent reporting, real-time monitoring. Companies should exceed these requirements, building sophisticated impact measurement systems that demonstrate return on social investment.

    ESG Integration: From CSR to Holistic Sustainability

    The global frontier: integrating Environmental, Social, and Governance (ESG) frameworks that encompass but transcend traditional CSR.

    International leaders adopt Science Based Targets initiative (SBTi) for climate commitments, join RE100 for renewable energy transition, pursue EV100 for electric vehicle fleets. They establish dedicated ESG committees at board level, integrate sustainability into executive compensation, publish comprehensive sustainability reports aligned with Global Reporting Initiative (GRI) standards.

    Indian firms must recognize ESG as business imperative, not compliance burden. Climate action reduces operational risks. Supply chain sustainability ensures resilience. Diversity and inclusion attract global talent. Robust governance mechanisms build investor confidence.

    Maharashtra, Gujarat, Uttar Pradesh, Rajasthan, Karnataka, and Tamil Nadu currently dominate CSR fund receipt—but ESG integration demands geographic equity, ensuring underserved regions receive proportionate investment.

    Transparency and Rigorous Impact Measurement

    Global best practice demands obsessive transparency and data-driven impact assessment.

    Leading corporations publish detailed CSR reports with specific metrics: students educated, patients treated, carbon sequestered, women entrepreneurs trained. They conduct third-party evaluations, randomized controlled trials, longitudinal studies measuring sustained impact years after program completion.

    Indian companies must move beyond anecdotal success stories and input metrics (money spent, events conducted) to outcome metrics (lives improved, behaviors changed, systems strengthened). Rigorous documentation, digital tracking, independent audits, and public disclosure build credibility and enable continuous improvement.

    Governance Architecture: Institutional Commitment

    Global leaders establish robust governance structures ensuring CSR isn’t dependent on individual champions but embedded institutionally.

    Board-level CSR/ESG committees provide strategic oversight. Chief Sustainability Officers hold executive authority. Cross-functional teams integrate social impact across business units. Employee volunteer programs democratize participation. Supplier codes mandate responsible practices throughout value chains.

    Indian firms should elevate CSR from compliance function to strategic capability, with dedicated leadership, adequate resourcing, and clear accountability mechanisms that survive leadership transitions and market fluctuations.

    The Competitive Advantage

    Why should Indian firms urgently adopt these global best practices? Because CSR excellence drives competitive advantage in increasingly conscious markets.

    Consumers prefer purpose-driven brands. Investors demand ESG performance. Employees choose companies with authentic social commitments. Communities welcome businesses that contribute meaningfully. Governments partner with corporations demonstrating responsibility.

    As India aspires toward developed nation status, Corporate Social Responsibility must evolve from defensive compliance to offensive strategy—where social impact and business success reinforce each other, where doing good and doing well become indistinguishable.

    The Rs 15,524 crore currently deployed annually represents immense potential. Channeled through global best practices—strategic alignment, long-term commitment, stakeholder engagement, collaborative ecosystems, technological innovation, ESG integration, rigorous measurement, and institutional governance—Indian CSR can transform from regulatory obligation to national competitive advantage.

    The global playbook exists. The question isn’t whether Indian firms can adopt these practices. It’s whether they can afford not to.

  • SEBI’s ESG Reforms Usher in Transparency, Face Teething Issues

    SEBI’s ESG Reforms Usher in Transparency, Face Teething Issues

    The Securities and Exchange Board of India’s (SEBI) April 29, 2025, circular on ESG Rating Providers (ERPs) has reshaped India’s capital markets, with its key provisions now in full swing, as per the July 11 Master Circular (SEBI, April 29, 2025; SEBI, July 11, 2025).

    By mandating public disclosure of ESG scores on stock exchanges and company websites, requiring ERP registration, and enforcing strict rating withdrawal rules—such as bondholder consent or minimum three-year coverage—SEBI is driving unprecedented transparency (SEBI, April 29, 2025).

    This empowers investors, particularly retail ones, to weigh sustainability alongside profits, while pushing companies to prioritise environmental, social, and governance (ESG) standards.

    The rules are clear: subscriber-pays ratings can only be withdrawn if there are no active subscribers or if firms skip their Business Responsibility and Sustainability Report (BRSR).

    Index-linked ratings, like those tied to the Nifty 50, remain in place as long as the index has subscribers. For issuer-pays bond ratings, withdrawal requires 75% bondholder approval or coverage for half the bond’s tenure. Mergers or repaid bonds allow withdrawals, but only with proper documentation (SEBI, April 29, 2025).

    Yet, challenges loom large. SEBI has flagged inconsistent data quality and a shortage of assurance providers for ESG/BRSR reports, raising concerns about the reliability of ratings (SEBI, September 2025).

    Some ERPs are still refining their methodology disclosures, though efforts to standardise are ongoing (SEBI, July 2025). Smaller companies, in particular, struggle with BRSR compliance, which could undermine the system’s effectiveness.

    Looking ahead, SEBI is eyeing alignment with global frameworks like ISSB and TCFD by 2026, aiming to make ESG a strategic cornerstone rather than a compliance burden (SEBI, July 2025).

    These reforms position India’s markets as a hub for sustainability-focused investors, but addressing capacity gaps and data inconsistencies is critical to sustaining this momentum.

    For now, SEBI’s bold push is setting a new benchmark for transparency, even as it navigates early hurdles.

  • India’s Bold Crackdown on Greenwashing: A Wake-Up Call for Corporate India

    India’s Bold Crackdown on Greenwashing: A Wake-Up Call for Corporate India

    In an era where sustainability is no longer a buzzword but a boardroom imperative, India’s regulatory blitz against greenwashing marks a pivotal shift towards genuine accountability. As we navigate the complexities of climate change and ethical governance, the Enhanced Sustainability Reporting (ESR) mandates, rolled out in 2024 and fortified through 2025, stand as a beacon of progress.

    Yet, they also expose the stark reality: nearly 80% of green claims in the Indian market are misleading or unsubstantiated, eroding consumer trust to a dismal 29%. It’s high time corporate India heeds this warning—greenwashing isn’t just bad PR; it’s a betrayal of stakeholders that could torpedo long-term value.

    Greenwashing, the insidious art of inflating environmental credentials to dupe investors and consumers, has long plagued global markets. In India, it’s particularly rampant in high-impact sectors like energy, manufacturing, and fashion, where vague promises of “eco-friendly” practices often mask business-as-usual pollution. The fallout? Not only does it undermine genuine sustainability efforts, but it also distorts market competition, favoring slick marketers over true innovators.

    Enter the government’s decisive intervention: starting October 2024, every environmental claim must be backed by verifiable documentation and third-party certification. Mandating digital tools like QR codes linking to audited evidence is a masterstroke—it democratizes transparency, empowering consumers to scan and scrutinize in seconds. This isn’t overregulation; it’s smart governance that aligns corporate narratives with verifiable actions.

    The teeth in these rules come from the penalties, which are refreshingly severe. Repeat offenders face fines up to ₹5 million (about USD 60,000) and even criminal prosecution. Such measures send a clear message: sustainability isn’t optional; it’s enforceable.

    Coupled with the Securities and Exchange Board of India (SEBI)’s Business Responsibility and Sustainability Report (BRSR) framework, which demands detailed ESG disclosures from top listed companies, these steps are reshaping corporate governance. Non-compliance doesn’t just invite fines—it risks reputational carnage and investor flight. In a market where ESG funds are surging, companies ignoring this could find themselves sidelined by discerning global capital.

    But enforcement is only as good as its oversight. The Parliamentary Standing Committee on Finance’s push for a dedicated ESG body with forensic powers is spot-on. By embedding ESG into directors’ fiduciary duties, it ensures that sustainability isn’t siloed in CSR reports but woven into core strategy.

    Imagine auditors with the tools to dissect claims, much like forensic accountants probe financial fraud—this could be the game-changer India needs to lead in the global green economy.Of course, challenges remain. Smaller firms might struggle with compliance costs, and the risk of overzealous enforcement could stifle innovation. Policymakers must balance rigor with support, perhaps through subsidies for certifications or streamlined digital platforms. Ultimately, though, these reforms are a net positive. They compel businesses to walk the talk, fostering a culture where ESG compliance drives competitive advantage, not just checkboxes.

    India’s ESR crackdown isn’t mere regulatory muscle-flexing; it’s a strategic pivot towards a resilient, trustworthy economy. For corporate leaders, the choice is clear: embrace authentic sustainability or face the consequences. In the end, true green progress will benefit not just the planet, but the bottom line too.

  • Legal action critical for sustainable development: Induslaw’s Saurav Kumar

    Legal action critical for sustainable development: Induslaw’s Saurav Kumar

    Robust waste management techniques coupled with innovation for eco-friendly alternatives will surely orchestrate a sustainable future.

    Concurrent with technological innovation, legal action is critical for sustainable development. The Plastic Waste Management Rules, 2016 are playing a pivotal role in creating more accountability of producers, importers and brand owners (PIBOs) of goods in the end-of-life of their plastic products.

    To this end, the “Extended Producer Responsibility” framework prescribes yearly targets to different classes of PIBOs, to ensure that they are focussing on recycling and reusing plastic.

      Robust waste management techniques coupled with innovation for eco-friendly alternatives will surely orchestrate a sustainable future.

    On the other hand, Environmental, social, and corporate governance (ESG) ESG disclosure and transparency is becoming the new normal for businesses in India.

    By reporting their environmental impact, social initiatives, and governance practices, organizations are fostering trust, accountability, and informed decision-making among investors, consumers, and stakeholders.

    Saurav Kumar, Partner, INDUSLAW

  • “Single day not sufficient to address critical environment issues”

    “Single day not sufficient to address critical environment issues”

    Our environment, be it in India or across the globe needs our unwavering attention.

    As the world celebrates the 50th World Environment Day with ‘beat plastic pollution’ as the focus, the kind of impact it should have had in 50 years on issues like wildlife, biodiversity, forests and water conservation is clearly missing. Be it plastic pollution, loss of vegetation and biodiversity, air and water pollution, climate change, perishing wildlife, there are so many critical environmental issues that a single day in the year will not suffice.

    Every day needs to be treated as a day for the environment so that we could truly reach a stage where it is a matter of celebration for all of us. Our environment, be it in India or across the globe needs our unwavering attention.

    The governments (states and centres), local authorities, industry owners, citizens, non-governmental organisations – every stakeholder across the globe needs to work in consonance with the other to ensure that we save our environment and this planet.

    If only we succeed, we would have a reason to celebrate World Environment Day. Until then we need to treat it as a serious responsibility which needs to be discharged on a daily basis.

      Nawneet Vibhaw, Partner, Shardul Amarchand Mangaldas & Co

  • About 174 applications of CSR-related defaults in process of compounding

    About 174 applications of CSR-related defaults in process of compounding

    So far, sanction for prosecution has been accorded in 366 cases. Of these, 174 applications for compounding have been made.

    About 174 applications of Corporate Social Responsibility (CSR)-related defaults are in the process of compounding, according to the data maintained by the Minsitry of Corporate Affairs.

    Earlier, CSR related defaults were compoundable offences. So far, sanction for prosecution has been accorded in 366 cases. “Of these, 174 applications for compounding have been made and 121 cases have been compounded,” the data showed.

    Now, the non-compliance of CSR provisions has been converted as a civil wrong with effect from January, 22 2021.

    The penal provision related to violation of CSR provision with respect to CSR expenditure is provided under Section 135 (7) of the Act. As per the existing provision, penalty is prescribed against the company and every officer in default which is determined on the basis of unspent CSR amount of the company.

    The broad framework for CSR has been provided under Section 135 of the Companies Act, 2013, Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. The CSR framework is disclosure-based and CSR mandated companies are required to file details of CSR activities annually in the MCA21 registry.

    The government monitors the compliance of CSR provisions through the disclosures made by the companies in the MCA21 portal.

    Whenever any violation of CSR provisions is reported, action against such non-compliant companies is initiated as per provisions of the act after due examination of records and following due process of law.

  • DMK leader asks if govt plans to use CSR funds of ONGC for upcoming South Indian Kumbh Mela

    DMK leader asks if govt plans to use CSR funds of ONGC for upcoming South Indian Kumbh Mela

    Minister of State for Petroleum and Natural Gas Rameswar Teli replied that CSR is a Board-driven process and the Board is empowered to plan, approve, execute and monitor the CSR activities based on the recommendations of its CSR committee.

    DMK leader S Kalyanasundaram in the Rajya Sabha asked the government if it plans to utilise the CSR funds of the Oil and Natural Gas Corporation (ONGC) for the upcoming South Indian Kumbh Mela called as MAHAMAHAM, to be held in 2028.

    He also asked if the funds will be utilised for the upgradation of basic civic amenities such as beautification of the areas around the temples, building of dharamshalas for the pilgrims, upgradation of railway stations, bus stands and other public transport and hospitals.

    Replying to the written question, Minister of State for Petroleum and Natural Gas Rameswar Teli said Corporate Social Responsibility (CSR) is a Board-driven process and the Board of the company is empowered to plan, approve, execute and monitor the CSR activities based on the recommendations of its CSR Committee.

    Oil and Gas Public Sector Undertakings undertake CSR activities under the heads identified under Schedule VII of the Companies Act, 2013 with special focus on Health (Nutrition, Sanitation, and Drinking Water), Education, Skill Development, Rural Development, Women Empowerment, Environment Oriented Initiatives and Care for the Elderly and Differently-abled Persons, he responded.