I’ll tax, you’ll deliver

After several years and numerous committees, the government’s success in getting the new Companies Bill cleared by the Cabinet is a welcome move, though the real test is Parliament passing it. The Bill moves in the right direction by increasing disclosure norms for India Inc, protecting rights of minority shareholders and bringing about stricter penal provisions. What’s worrying, however, is that the government retains the provision that mandates all companies earmark 2% of the their profits (average of the last three years) for corporate social responsibility (CSR)—if they can’t, they have to explain why. CSR is supposed to be voluntary, but it is now being converted into a cess—that’s encouraging sham CSR-spend and also bringing in another form of inspector-raj.

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