<p>I recently attended the World Corporate Social Responsibility (CSR) Summit in Mumbai which brought together nearly thirty heads of CSR departments and as many NGOs. The primary areas of discussion were the implications of the new 2% CSR policy included in the new Companies Bill in India.</p><p>The Indian parliament is currently in the process of passing this bill, which will make it compulsory for companies of a certain size to spend 2% of their profits towards CSR activities. Specifically the bill states:All companies with revenue greater than Rs. 1000 Cr ($200M) or profits of 5 Cr ($1M) must spend 2% of the average of the last 3 years profits, towards CSR activityThe Board must designate a 3-member CSR committee (including one Independent Director) to ratify decisions on spendingEmployee expenses will not be classifiable as CSR spendingPoverty alleviation, healthcare, education and social business ventures have all been included as potential areas of investmentIf the spend is not made in that year, the CSR committee would have to submit an explanation for why that has occurred to not be penalized</p><p>If the bill passes, India will be the first country in the world to mandate this kind of expenditure across the board. (Some countries, like Malaysia, have mandated spending towards CSR for certain industries such as mining.)</p><p>While most individuals at the Summit took it for granted that the bill will pass soon and with no changes in the 2% number, the provisions of the bill were hotly debated. Many agreed that it was imperative to ensure Board level commitment to permit organization-wide buy in, but wondered why there was a loophole with the clause which allows for easy deferring of expenditure (see point 5).</p><p><a href="http://blog.acumenfund.org/2013/03/12/new-bill-means-big-funding-for-indias-social-enterprises/">Keep reading...</a></p>