core sector communique

New guideline to strengthen and enable the Indian corporate sector to evolve into a global leader in responsible business- Murli Deora

Union Minister of Corporate Affairs Shri Murli Deora today released the “National Voluntary Guidelines on Social, Environmental and Economic responsibilities of Business” that will mainstream the subject of business responsibilities”. At a function held in Ashoka Hotal today the Minister expressed the hope that these guideline will strengthen and enable the Indian corporate sector to evolve into a global leader in responsible business. He said the beginning of industrialization marked the transition from merchant charity to industrial philanthropy in India which was more secular, more inclusive in terms of caste, creed and community and more oriented to bringing progress to society through western style modern institutions.

Apart from making political donations for the freedom struggle, business fraternity also contributed towards many of the social and cultural causes. Mahatma Gandhi expounded the theory of trusteeship of wealth. Influenced by his teachings, many businessmen contributed for the cause of removal of untouchability, women’s emancipation and rural reconstruction.

Shri Deora said his ministry has been pursuing the agenda of providing an effective regulatory framework to the Indian corporate sector that enables them to freely exploit their energies to develop while contributing to the overall growth of the society. He said his ministry has taken a number of initiatives the past few months in the legislative, regulatory, service delivery and capacity building areas. These are aimed to modify and upgrade the procedures and provisions under various Laws are as under:-

(i) Introduction of the online application process for obtaining Director’s Identification Number (DIN), the online payment of fees by companies, the Green Initiative allowing paperless compliance under the Companies Act, 1956 and the Easy Exit Scheme, 2011.

(ii) Initiation of introduction Companies Bill, 2011 in the Parliament. Convergence of Indian Accounting Standards with International Financial Reporting Standards. And launching of Investor Awareness Programmes for the benefit of small and medium investors to safeguard their interest.

(iii) Notification of Merger and Acquisition procedures.

(iv) Also undertaken the Initiative to formulate Policy to appoint at least one woman direction on the Board of Directors if it has five directors.

(v) Formulation of the National Voluntary Guidelines on Social, Environmental and Economic Responsibilities of Business.

He said Public Sector Undertakings have been undertaking CSR activities in a big way. It has been mandated for them to spend 2% of Profit After Tax (PAT) on CSR activities. Their contribution has been noteworthy in this field. The private corporate sector has come a long way from the days of ad hoc charity. The concepts of CSR, corporate citizenship and increasingly, Responsible Business are salient aspects of many companies in India. They undertake the social environmental and economic responsibilities such as establishing charitable trusts, foundations and mega institutions for public causes, directly running community development programmes, forming partnerships with the Government or NGOs, etc.

In his address Shri R.P.N. Singh, Minister of States for Corporate Affairs said the Ministry has formulated the “National Voluntary Guidelines on Social, Environmental and Economic responsibilities of Business” that will mainstream the subject of business responsibilities. He said the guidelines, being released by the Minister for Corporate Affairs, are a refinement over the Corporate Social Responsibility Voluntary Guidelines 2009. These guidelines have been formulated keeping in view the diverse sectors within which businesses operate, as well as the wide variety of business organizations that exist in India today – from the small and medium enterprises to large corporate organizations. The Guidelines are applicable to all such entities, and are intended to be adopted by them comprehensively, as they raise the bar in a manner that makes their value-creating operations sustainable.

In his welcome address, Sh. Manoj K Arora, Director IICA said the release of the guidelines marks an important policy initiative by the Ministry of Corporate Affairs. He that the new guidelines have expanded the scope of CSR to cover social, environmental and economic responsibilities of business.'

The Secretary in the Ministry of Corporate Affairs, Shri D.K.Mittal said that the guidelines are not prescriptive in nature, but are based on practices that take into account the realities of Indian business and society as well as the global trends and good practices adapted to the Indian context. It urges businesses to embrace the “triple bottom-line” approach whereby its financial performance can be harmonized with the expectations of society, the environment and the people it interfaces with, in a sustainable manner. The adoption of these Voluntary Guidelines would also improve the ability of businesses to enhance their competitive strengths, improve their reputations, their ability to attract and retain talent and manage their relations with investors as well as the society at large.

A large number of corporate representatives and foreign dignitaries including the Sh Anil Agarawal, former President ASSOCHAM, Mr. Bob Hiensch, Ambassador of Netherlands, Senior officials of the Embassies of UK and Germany, Team from World Bank, President of ICAI, Vice President of ICSI, Members of the Board of Governors of IICA were present on the occasion.