CSR – possible missing link for clean energy development taken off the table
The Amendment to the Companies Act 2013 is no longer mandatory.
Although CSR has been in place in India for some time, it was not done through mandatory legal mechanisms. In 2014, this changed. An amendment to the Companies Act (2013) created a provision for mandatory expenditure on CSR for any company registered and doing business in India with a net worth of INR 5 billion (MSEK 592) or net profit of INR 50 million (MSEK 6). This definition resulted in over 8,000 companies in India being brought into the CSR ring, and a budget of over INR 180 Billion (BSEK 21) made available for activities approved by the Government of India.
Lead by the Ministry of Finance under the Indian Institute of Corporate Affairs (IICA), 10 clear areas were put forward for CSR expenditure. This included investment in sustainable development, technology incubators, and clean energy development. It opened up an immense opportunity for companies looking to find much needed business capital in a risk adverse environment.
However, strong opposition has led to revoking the mandatory nature of the Amendment. Still, IICA believes that companies will continue to develop CSR strategies, because of the overall merit returned for such activities.