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Parl panel suggests third-party audit of CSR spending by companies

The Parliamentary Standing Committee on Finance expressed concerns over the monitoring mechanism in ensuring compliance with the provisions of CSR

CSR spending | high tech companies in India | Indian corporates

Press Trust of India  |  New Delhi 

Photo: Shutterstock

A Parliamentary panel on Tuesday suggested that the government should conduct a third-party audit of by corporates.

The Parliamentary Standing Committee on Finance, headed by BJP member Jayant Sinha, also expressed concerns over the monitoring mechanism in ensuring compliance with the provisions of CSR, saying that information regarding such spending by are "insufficient and difficult for a layperson to access".

Under the Act, 2013, a certain class of profitable entities are required to shell out at least 2 per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR) activities in a particular fiscal.

The Act is implemented by the corporate affairs ministry.

While the ministry is of the opinion that the existing legal provisions provide adequate safeguards, the committee recommends that a third-party audit of may be carried out by the ministry "which would bring about transparency in CSR disclosures and accountability of in their CSR spending," the panel said.

The recommendation is part of its report on the ministry's demand for grants for 2022-23 tabled in Parliament on Tuesday.

Among others, the committee has suggested that contribution to the Chief Minister's Relief Fund may be included under Schedule VII of the Act.

Schedule VII pertains to CSR.

(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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First Published: Tue, March 22 2022. 22:33 IST