The Standing Committee on Finance, headed by BJP leader Yashwant Sinha, is in favour of making corporate social responsibility (CSR) mandatory for companies.
It has called for a modification in the language of the Companies Bill 2011 so as to “ensure” that corporates spend two per cent of their net profit on CSR activities.
The Companies Bill 2011 in the present form specifies that companies “shall make every endeavour to ensure” that the stipulated percentage of sum is spent on CSR.
The words “shall make every endeavour to ensure” be modified with “shall ensure”, the Standing Committee has suggested in its report on Companies Bill 2011.
This report was tabled in the Lok Sabha by Biju Janata Dal member Bhartruhari Mahtab here on Monday.
The Parliamentary Panel has also recommended that CSR activities of companies be directed in and around the area they operate.