Govt wants industry to trade in CSR

Union Minister for Corporate Affairs Salman Khurshid has asked the industry to propose a corporate social responsibility (CSR) system that rewards the industry.

The industry should think along the lines of the ‘carbon credit’ system and see if they could come up with a system that remunerates them for their CSR initiatives, the minister said.

Addressing a conference on ‘Companies Bill 2009’ organised by the Federation of Indian Chambers of Commerce and Industry (Ficci) here today, Khurshid suggested that the incentives for CSR could even be fiscal incentives that are proportionate to the CSR initiatives being undertaken.

“There can even be some way of trading your CSR credits, like carbon credits,” the minister suggested.

He said the ministry’s attempt was to see that the industry takes up CSR activities in such a manner that it turned out to be a next-generation affirmative action that went beyond reservations for weaker sections of the society.

On the issue of the remuneration to managing directors, the minister wanted industry to suggest if they require further changes in the current system. He invited industry’s views on the remuneration issue and the role of remuneration committees.

The minister said the ‘Companies Bill 2009’, that is currently being scrutinised by the Parliamentary Standing Committee on Finance will give a final shape to the legislative changes that are required in such matters. “The parliamentary committee has given top priority to the Bill and has held several consultations on the topic. We expect the committee to come up with its recommendations very soon,” the minister said. Once the committee’s recommendations are in place, the government will take the Bill to Parliament for legislation, he added.

Speaking on the occasion, corporate affairs ministry secretary R Bandyopadhyay sought industry opinion on the responsibilities of key management professionals in a company.

“Administration of the company and the role of the board should be discussed for any changes in the proposed amendments to the Bill,” he said.