Cement, Energy and Environment

2.2 Legisla ve Enactments and Judicial Developments Although there is a long history of Indian Corporate on CSR and many steller examples in this arena, the Indian government became dissa sfied with the extent of such expenditure and in 2008 first mooted to make it mandatory for companies to spend on CSR ac vi es. One year later, the Indian government relented under pressure from business and issued Voluntary guidelines proposing that companies allocate 2% of its revenue to CSR expenditure. Subsequently, the Indian government found the response to these Voluntary guidelines unsa sfactory and so in 2012 moved again to make CSR expenditure mandatory (Press Trust of India, 2011). Ini a ves undertaken by public sector agencies have been discussed under the classifica ons of so and hard legisla ve policy. A so regula on includes guidelines and principles that are voluntary in nature and not enforceable by law (Ashley, 2014). Hard regula ons refer to mandatory regula ons or legisla ons issued by the government. By going beyond voluntary guidelines, the government increased its role in ins tu onalising CSR in the country and compelled organisa ons to think more deeply about their responsibili es to a wider set of stakeholders. 2.2.1 So regula ons: · Corporate Governance and CSR voluntary guidelines, based on guidelines of FICCI, CII and the report of the expert group setup under the IICA, which examined the global best prac ces, were issued by the MCA in 2009. · In 2011, governance and CSR guidelines were merged to form the 'na onal voluntary guidelines on social, environmental and economic responsibili es of business', which provided nine core principles of CSR, guidance on implementa on of principles, guidelines for applica on to MSMEs and a repor ng framework (MCA, 2011a). 2.2.2 Hard regula ons: · The purview of legisla on in areas of labour welfare, wage, environment, consumer protec on, etc. overlap with areas closely related to CSR. · The DPE issued the mandatory 'Guidelines on CSR for Central Public Sector Enterprises' in, March 2010, which provided guidance on planning, implemen ng, funding, documenta on and monitoring of CSR ac vi es. The guidelines were revised, to also focus on internal stakeholders like employees, apart from external ini a ves for the environment and community, in 2013 (DPE, 2013). Public sector enterprises are organisa ons in which the government has a majority stake holding. · RBI and financial inclusion – To ensure availability of appropriate financial products and services of major ins tu onal players, at affordable costs to weaker sec ons and low income groups, the RBI issued guidelines, for licensing of new private sector banks, requires banks to open at least 25% of its branches in unbanked rural centres. The RBI also requires financial ins tu ons to formulate a board approved 'Financial Inclusion Plan' for three years, to ensure considera on of weaker sec ons (Chakrabarty, 2011; RBI, 2012). · SEBI mandated top 100 companies, in terms of market capitalisa on, to submit Business Responsibility Reports, as a part of their annual reports, describing measures taken by them according to the key 34