(ET)
The Parliament has passed amendments to Companies Act. The bill now advocates for stricter laws for corporate social responsibility (CSR) spending by corporates. After the amendment, violation of the CSR rules could land company officials in jail for up to 3 years. Companies violating the rules will face a penalty of Rs 50,000 to Rs 25 lakh . Companies will have to give details about the spending of money and they have been given a three-year window to adhere.
Earlier, finance minister Nirmala Sitharaman has said legitimate profit earning cannot be devoid of social responsibility, and that companies cannot get away without meeting corporate social responsibility requirements. “It was easy for people to interpret that either we comply or we give an explanation and get away with it. Now that is not happening because Section 135 (of the Companies Act) is being amended to provide specific penal provision in case of non-compliance,” said Sitharaman, adding that the corporate affairs ministry will now be able to give directions to companies to ensure compliance with CSR norms.
