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CSR is the latest buzzword that matches Corporate Governance in terms of brand recall and search in most electronic media. Off late even the print media has stopped writing much on Governance; maybe with so many scams they have lost faith in the form and substance of Governance. The new provision in Companies Act 2013 lists out in Schedule IV the areas of CSR spend, which includes Education. But for promoting education in the country the Government has been collecting education cess for the last so many years from taxpayers. The government should have submitted an accountability statement on the collections and the utilization of this education cess before asking corporates to further spend CSR in education. The government has now made it mandatory for corporates to spend another 2 % of its profits interalia for education this contribution in addition to the existing kitty of the education cess. The moot point is whether it is CSR in education or there has to be an education in CSR.

Most corporate and its CEO is happy to spend on education but in the guise of CSR some entrepreneurs are setting up residential schools that are beyond the affordability of a higher middle class leave alone the lower strata. Others are using this opportunity to either partner with large education institution that are struggling for working capital or using CSR fund to take over these institutions, a good way of diverting the profits of the companies into better and lucrative areas of business. Other initiatives where corporates are using CSR in education include those companies who want better brand mileage and advertise in wrappers of their products informing the common man that every time he buys their product a child gets education in some remote village of the country. The question is how many educational institutions have a course on CSR to train persons and educate them first to ensure that this initiative is better understood. CSR is now an Industry and it has lots of money and any activity where there is too much of money without any regulations there is bound to be a scandal followed by a huge scam. CSR initiative is what requires education more than

There has to be an effort to educate the interested few in CSR and there is a need for development of vocational skills to handle CSR initiative. It includes skilled and unskilled force to serve mankind. There are not too many institutions who have a full time course on CSR, there are institutions like TISS, BISS or KISS –that are Institutes of Social Science, for persons who are front runners in investing or deploying the funds of CSR and for people managing the funds.

The emphasis of any regulation should be first to bring in regulation to control the initiative, think if any wrong can take place on account of these new initiatives and then involve the stakeholders. Whereas CSR like any other initiative is brought out without any regulation for the corporates who are asked to spend, NGO who are made to receive the amount and spend. Like any other initiative where remedy becomes law, one can only hope that there is no immediate scam in this NGO Boom and the regulators act before the bubble busts. There are only private seminars that discuss the if’s and but’s of CSR, whereas the tax regulator is quiet on this subject, the corporate affairs regulator may not be aware of what will happen, in fact there is no regulator to regulate this activity of CSR. From a common man perspective only the spending for a cause is being projected and in the process we have had NGO scams in AIDS vaccination project or any other initiative where money was laundered in the guise of CSR. Both the NGO and the corporate are not being educated on what can go wrong. The accounting, taxation, finance, angle to the money that is deployed will and continue to be a mystery in the country and there is no clarity as to who should do what, whereas every one is talking about doing something. With so much of ambiguity in the CSR cause, where is the question of CSR spend?

CSR initiative can be postponed for two years and the government can take adequate measures to educate the corporates and NGO’s on the structuring and spending of the money that is to be spent for CSR activities, which is a matured way of handling a great initiative that can reach the common man in the real sense. First there has to be Education n CSR before any CSR spend in Education and there arises the need for the regulator to educate Raju, the NGO to become a gentleman to handle CSR in the country.

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Category Corporate Law, Other Articles by - Sundharesan Jayamoorthi 



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