Can Indian companies be regulated to become more socially responsible?Santhosh Ramdoss
A Government of India regulation mandating companies to commit a minimum level of resources towards socially responsible projects? Does the idea seem a little far-fetched? Well, you are not the only one who is surprised. Here is the update from Forbes.com:
In early March, corporations were surprised by an announcement from the government’s Corporate Affairs Minister Salman Khurshid: Corporate Social Responsibility could become written law if companies did not step up their social responsibility footprint. He said, “You can’t hope that everything will work without a basic legislative line drawn. But where that line should be drawn must come by way of consensus from industry.”
It is unclear at this stage how serious is the proposal, and of course, it could be years before any bill becomes a law. However, the Indian Government is adopting a pioneering approach. The corporate affairs minister has even recommended setting up a CSR Stock Exchange, where companies can trade ‘social credits’, similar to carbon markets where companies buy and sell carbon credits. It is not surprising that the Government of India is getting companies to think seriously about CSR, given that this aligns quite well with the ‘Inclusive Growth’ agenda unveiled by the Prime Minister 2 years ago.