📰 ‘No First Use’ nuclear policy depends on circumstances: Rajnath Singh
Defence Minister tweets after visiting nuclear test site in Pokhran
•The future of India’s No First Use (NFU) policy on nuclear weapons depended on “circumstances,” Defence Minister Rajnath Singh said from the nuclear test site in Pokhran on Friday.
•August 16, 2019, marks the first death anniversary of former Prime Minister Atal Bihari Vajpayee, under whose government India conducted nuclear tests in 1998.
•“Pokhran is the area which witnessed Atalji’s firm resolve to make India a nuclear power and yet remain firmly committed to the doctrine of NFU. India has strictly adhered to this doctrine. What happens in future depends on the circumstances,” he said in a post on Twitter after visiting Pokhran.
•Mr. Singh added that India attaining the status of a responsible nuclear nation became a matter of national pride for every citizen of the country and, for this, the nation would remain indebted to the greatness of Vajpayee.
•India has put in place its nuclear doctrine with NFU and massive retaliation forming its core tenets soon after it tested nuclear weapons in the summer of 1998. The concept of maintaining a minimum credible deterrence and a nuclear triad for delivery of nuclear weapons based on aircraft, missiles and nuclear submarines flow from that.
•Mr. Singh stopped over in Pokhran on the way to attend the closing ceremony of the 5th International Army Scout Masters Competition at the Jaisalmer military station. Indian Army has won the competition that has eight participating teams from Armenia, Belarus, China, Kazakhstan, India, Russia, Sudan and Uzbekistan. India participated in the games for the first time. The competition is part of the International Army Games organised by the Ministry of Defence, Russia.
oEnd of special status to Jammu and Kashmir an internal matter, says Syed Akbaruddin, India’s envoy to the United Nations.
•Reiterating that issues around Article 370, i.e., special status to Jammu & Kashmir, were an internal matter, India played down the significance of Friday’s UN Security Council’s “closed consultation” meeting on Kashmir.
•Indian Ambassador to the UN Syed Akbaruddin accused Pakistan and China of attempting to impart greater significance to the meeting than was warranted.
•“After the end of the Security Council’s closed consultations, we noted that two states who made national statements tried to pass them off as the will of the international community,” Mr. Akbaruddin said, as he took to the podium after the meeting.
•“The Security Council is a very deliberative… institution. It works in a very considered manner. Its outcomes are provided to all of us through the [UNSC] President. So if national statements try to masquerade as the will of the international community, I thought I will come across to you too and explain our national position,” he said, adding that Article 370 is an entirely internal matter of India with no external ramifications.
•Neither India nor Pakistan were part of the UNSC closed-consultations, which are informal meetings that do not have a formal outcome. Sometimes “press elements” can be agreed by consensus of the UNSC members, but no such statement emerged from Friday’s meeting.
•Mr. Akbaruddin told reporters that the abrogation of Article 370 was done to enhance good governance and socio-economic development in Jammu and Kashmir and that the UNSC consultations had taken note of this.
•Mr. Akbaruddin, speaking after his Chinese and Pakistani counterparts and in sharp contrast to them, took questions from reporters, including from Pakistan.
‘U.N. happy with peace efforts’
•Mr. Akbaruddin said the U.N. Security Council had appreciated India’s efforts to restore normalcy in Kashmir.
•“The Chief Secretary of the Union Territory of Jammu & Kashmir announced a whole set of measures that the government is undertaking to move towards normalcy. We are gratified that the Security Council in its closed consultations appreciated these efforts, acknowledged them and indicated that this was the direction in which they would like the international community to move,” he said.
•The ambassador also said India was committed to all agreements it had signed on the issue and said India would sit down to talk with Pakistan when the latter’s support for terror ceased. “Stop terror to start talks,” he said.
•“India's commitment to address these issues on the bilateral track has very broad acceptance globally,” Mr. Akbaruddin said, in response to a question on Russia’s view that the issue be resolved bilaterally between India and Pakistan, contrary to what Pakistan was seeking at the UN on Friday.
•On concerns about human rights abuses by India in Jammu and Kashmir, he said India had a commitment to democracy and its courts would resolve any issues.
•“There will be issues discussed and if there are issues these will be addressed by our courts. We don’t need international busybodies to try and tell us how to run our lives. We are a billion-plus people,” he said.
Support for bilateral talks
•A diplomat from a UNSC Member State told The Hindu that the majority of UNSC members backed a bilateral dialogue in accordance with the Simla Agreement.
•“The dominating feeling there [at the consultation] was that all UNSC members pay close attention to the situation; according to many of them, considering that this is a bilateral dispute, the priority should therefore go to a bilateral dialogue, in accordance with the Simla agreement, with the aim to appease the tensions. The lifting of restrictions by India is perceived as a good and needed measure,” the diplomat told The Hindu.
China’s view
•The first to speak was China , a permanent member of the 15- member UNSC. China’s UN envoy Zhang Jun said UNSC members had “serious” concerns about the situation including the human rights situation.
•“It’s the general view of members that parties concerned should refrain from taking any unilateral action that might further aggravate the tension there,” he said.
•Mr. Zhang said that it was China’s view that the Kashmir issue is an international and undecided one and must be peacefully resolved in accordance with the UN charter, UNSC resolutions and bilateral agreements.
•“What should be pointed out is that India’s action has also challenged China’s sovereign interests and violated bilateral agreements,” Mr Zhang said, saying China was seriously concerned about the issue.
•China and India share a disputed border in the Aksai Chin region of Ladakh.
Pakistan’s view
•Pakistan’s UN Ambassador Maleeha Lodhi said the fact that the UNSC consultation was held signified that the issue was not internal to India and that Pakistan stands ready for a “peaceful settlement” of the dispute.
•“I think today this meeting nullifies India’s claim that Jammu and Kashmir is an internal matter for India. Today the whole world is discussing the occupied state and the situation there. As the Chinese ambassador emphasised, the human rights situation in Jammu and Kashmir, and it is an abysmal human rights situation with violations carried out with impunity by India – that too has been discussed by the Security Council today.”
•Ms. Lodhi quoted Pakistan Foreign Minister Shah Mahood Qureshi as saying this was the first step Pakistan was taking on behalf of the people of Jammu and Kashmir.
•“This is the first and not the last step. It will not end here,” she said.
📰 India gets its first national essential diagnostics list
ICMR says the current system can manage only few notified devices
•India has got its first National Essential Diagnostics List (NEDL) finalised by the Indian Council of Medical Research (ICMR) which aims to bridge the current regulatory system’s gap that do not cover all the medical devices and in-vitro diagnostic device (IVD).
•The current system is equipped to manage only the few notified devices.
•With this, India has become the first country to compile such a list that would provide guidance to the government for deciding the kind of diagnostic tests that different healthcare facilities in villages and remote areas require.
•The list is meant for facilities from village till the district level, noted ICMR.
WHO list
•WHO released first edition of essential diagnostics list (EDL) in May 2018. Even though WHO’s EDL acts as a reference point for development of national EDL, India’s diagnostics list has been customised and prepared as per landscape of India’s health care priorities.
•NEDL builds upon the Free Diagnostics Service Initiative and other diagnostics initiatives of the Health Ministry to provide an expanded basket of tests at different levels of the public health system, explained a senior ICMR official.
•He said implementation of NEDL would enable improved health care services delivery through evidence-based care, improved patient outcomes and reduction in out-of-pocket expenditure; effective utilisation of public health facilities; effective assessment of disease burden, disease trends, surveillance, and outbreak identification; and address antimicrobial resistance crisis too.
•“While affordability of diagnostics is a prime concern in low, middle-income countries like India, low cost, inaccurate diagnostics have made their way into the Indian market which has no place in the quality health care system,” said a senior official at ICMR.
•“The list also encompasses tests relevant for new programmes such as Health and Wellness Centres (HWCs) under the Pradhan Mantri Jan Arogya Yojana. In addition to tests, corresponding IVD products have also been recommended,” he added.
Key role
•Diagnostics serve a key role in improving health and quality of life and the ICMR has noted that the key challenges anticipated during implementation of the National EDL include — “Adoption by States and harmonisation with local standard diagnostic protocols and treatment guidelines, provision of requisite infrastructure, processes and human resources, ensuring quality of tests including EQAS and quality control and adequate utilisation of EDL tests for making informed decisions for treatment protocols.”
•In India, diagnostics (medical devices and in vitro diagnostics) follow a regulatory framework based on the drug regulations under the Drugs and Cosmetics Act, 1940 and Drugs and Cosmetics Rules 1945. Diagnostics are regulated under the regulatory provisions of the Medical Device Rules, 2017.
📰 A considered step that opens up new vistas
The abrogation of Kashmir’s special status is a major move towards ensuring an inclusive India.
•The recent decision by the government to abrogate Article 370 has resulted in a countrywide debate on the subject. The general perception is that a vast majority of people in the country feel that the abrogation is a welcome step. They also feel that the abrogation should not be viewed through a narrow political prism as it centres around the unity and integrity of the nation. In fact, it is also seen as a major step towards ensuring an inclusive India.
Historical perspective
•Before delving into the issue, one should understand the essence of Article 370; it was only a temporary, transitional arrangement and was never intended to be a permanent provision.
•Under Part XXI of the Constitution of India, which deals with ‘Temporary, Transitional and Special Provisions’, the special status was conferred upon Jammu and Kashmir (J&K) after Maharaja Hari Singh signed The Instrument of Accession on October 26-27, 1947.
•However, an important nugget of history is that Article 370 was not incorporated at the time of accession. It was included in October 1949 at the instance of Sheikh Abdullah, who was a member of the Constituent Assembly that drafted the Constitution. It became operative only in 1952.
•Under Article 370, Jammu and Kashmir State was allowed to have a separate Constitution and a Flag. Its Constituent Assembly, initially, and the State legislature, subsequently, were empowered either to adopt or not to adopt any law passed by the Indian Parliament. Except for matters such as ‘Defence’, ‘External Affairs’, ‘Communications’ and matters mentioned in ‘The Instrument of Accession’, the Indian Parliament had no jurisdiction on extending its legislations to the border State without the concurrence of Jammu and Kashmir.
•While considering the proposal to incorporate it in the Constitution, Prime Minister Pandit Jawaharlal Nehru advised Sheikh Abdullah to convince B.R. Ambedkar, who apparently was not in favour of it.
•In the book, Dr. B.R. Ambedkar Framing of Indian Constitution, by Dr. S.N. Busi, Dr. Ambedkar was cited as saying: “Mr. Abdullah, you want that India should defend Kashmir. You wish India should protect your borders, she should build roads in your area, she should supply you food grains, and Kashmir should get equal status as India, but you don’t want India and any citizen of India to have any rights in Kashmir and Government of India should have only limited powers. To give consent to this proposal would be a treacherous thing against the interests of India, and I, as the Law Minister of India, will never do. I cannot betray the interests of my country”.
•Even Pandit Nehru had pointed out in Parliament on November 27, 1963 that “Article 370 is part of certain transitional, provisional arrangements. It is not a permanent part of the Constitution. It is a part as long as it remains so.”
Hardly unifying
•History shows that instead of bringing people of Kashmir closer to the rest of India, Article 370 has only widened the chasm. This schism has been systematically widened by vested interests. While Article 370 has failed to benefit the people in a meaningful way, it was used by separatists to drive a wedge between those living in J&K and the rest of India. It was used by a neighbouring country to spread terrorism.
•The demand for abrogation of Article 370 has been under consideration for a long time. In fact, Parliament had discussed this way back in 1964. A discussion on a private member’s bill seeking abrogation of Article 370 found near-unanimous support back then.
•It would be pertinent to point out that the non-official resolution moved by Prakash Vir Shastri in the Lok Sabha was supported by leaders like Ram Manohar Lohia and K. Hanumanthaiya, a senior Congress leader.
•Hanumanthaiya not only pointed out that the members, irrespective of party affilations, wanted the abrogation of Article 370 to be made into law but also went on to say: “To go against or to say anything against this unanimous opinion in this House is to disown constitutional responsibility in a convenient manner. Article 370… stands in the way of full integration.”
•Of the 12 members who favoured its abrogation, seven belonged to the Congress including Inder J. Malhotra, Sham Lal Saraf (from J&K), H.V. Kamath, Socialist, Sarjoo Pandey (CPI) and Bhagwat Jha Azad, former Chief Minister of Bihar.
•The country felt that this provision needed to go sooner or later. As Jawaharlal Nehru’s colleague and then Home Affairs Minister Gulzarilal Nanda had told Parliament decades ago, “Article 370 is nothing more than a shell emptied of its contents. Nothing has been left in it; we can do it in one day, in 10 days, 10 months. That is entirely for us to consider.”
•Parliament and the Government have now come to the conclusion, finally, that such a dysfunctional provision has no relevance in the current context and that the time has come to integrate Jammu and Kashmir fully into the rest of India. Without having improved the lives of people in any way, Article 370 had become an impediment to the very development of the State.
A leveller
•The people of the country also need to know, as pointed out by the present Home Minister, Amit Shah, in the Lok Sabha recently, that key Central laws made for the welfare of citizens of the country could not be implemented in J&K due to Article 370. With its abrogation, a total of 106 Central laws will now be extended to J&K. Some of the key pieces of legislation include the Prevention of Corruption Act, the Land Acquisition Act, the National Commission for Minorities Act, the Right to Education Act and those relating to empowering local bodies.
•With Article 35A becoming void, the decades old discrimination against the women of J&K has been eliminated. They can now purchase and transfer property to their children, even if they get married to a non-resident.
•In my view, the abrogation of Article 370 is indeed a step in the right direction to safeguard the unity and integrity of India.
•The State of Jammu and Kashmir has been an integral part of our country. It will always remain so. So, the action to remove Article 370 is purely an internal matter. It goes without saying that India will not allow outsiders to meddle in its internal affairs. People should guard against false and mischievous propaganda by a section of the Indian and western media, which probably still believes in the colonial mindset of ‘divide and rule’.
•Parliament has carefully considered and taken a decision that this transitory provision needs to go and that J&K must be fully integrated with the rest of India. The naysayers who are alleging that constitutional impropriety has been committed must know that the Bill was passed by two-thirds in the Rajya Sabha and four-fifths in the Lok Sabha after an elaborate discussion.
Game changer
•I am sure that this integration fulfils a long-standing demand of many sections of the people in J&K, including Ladakh. The speech of the Ladakh MP, Jamyang Tsering Namgyal, in the Lok Sabha recently, was truly noteworthy, where he pointed out that Ladakh was not just a piece of land but a precious gem of Bharat. I am also confident that the status of a State would be accorded once things improve and total normalcy is restored in Jammu and Kashmir.
•The Government’s decision would facilitate greater investments by both individual entrepreneurs and major private companies in different sectors including hospitality, tourism, education and health. It would naturally generate much-needed employment for local youth. It would also enable greater scrutiny of the implementation of the schemes of the Government of India.
•In conclusion, it should be noted that the abrogation of Article 370 is a national issue involving our country’s safety, security, unity and equitable prosperity. It is a step in the right direction that the Indian Parliament has taken with an overwhelming majority. It is a step that opens up new vistas for the all-round development in a State that was relatively neglected. It is a stepping stone to enable an improved quality of life for the people of Jammu, Kashmir and Ladakh.
📰 Odisha govt. nod to set up maritime board
It will administer, control and manage non-major ports, non-nationalised inland waterways
•A proposal for establishment of the Odisha Maritime Board for administration, control and management of non-major ports and non-nationalised inland waterways was approved by the State Cabinet here on Friday.
•The Cabinet meeting, presided over by Chief Minister Naveen Patnaik, decided that the Board will function as a single window facilitator for the overall maritime development of the State.
•Earlier a Bill was passed in 2011 for constitution of the Board but was withdrawn because some more issues were to be added, according to official sources.
•Odisha is endowed with a vast coastline of 480 km, having rich, unique and natural port locations and perennial rivers.
14 non-major ports
•Out of the 14 sites identified for development of 14 non-major ports, two at Gopalpur and Dhamra are operational and two at Astarang and Subarnarekha are in the pipeline.
•According to the proposal, the Board will provide policy, guidelines and directions for the integrated development of ports and inland water transport keeping in view of the country’s security and defence related concerns.
•The salient features of the Board will be to provide construction, maintenance and operation of all non-major ports in the State directly or through PPP mode.
•The Board will be constituted with 12 members, the Chief Secretary as the chairperson along with representatives of stakeholders departments as well as representatives of the Central government.
•Among other proposals, the Cabinet also gave its approval for financial restructuring of the Odisha State Road Transport Corporation by which old dues of the Corporation and the State government will be settled forever.
OSRTC’s losses
•As per the decision, OSRTC’s accumulated losses of ₹189.99 crore will be taken up against the share capital in a phased manner. Once the losses are adjusted, the OSRTC will have the option to approach the financial institutions for taking up commercially viable projects for better passenger amenities.
📰 Giving shape to an elusive strategic concept
The post of Chief of Defence Staff will enable more efficiency in defence planning and help civil-military relations.
•The Prime Minister’s announcement in his Independence Day address on Thursday, appointing a Chief of Defence Staff (CDS), is one that could have a far-reaching impact on the management of defence in India.
•The issue of efficient management of the higher defence organisation came into sharp focus after the Kargil war in 1999, when the K. Subrahmanyam-headed task force was asked to examine questions about the anticipation and detection of Pakistani intrusions in Kargil and the military response. The strategic expert and his team highlighted the systemic issues bedevilling our national security structures, which included poor coordination and technological inadequacies.
•On its recommendations, the Government tasked a Group of Ministers (GoM) in the early 2000s to undertake a review of national security management. Their recommendations covered intelligence, internal security, border management and defence. These resulted in an overhaul, which included the appointment of a National Security Adviser, a strengthening of intelligence coordination mechanisms, upgrading the technological capacity of security agencies, and sharpening institutional responses to traditional and emerging internal security challenges. Defence management was the one area in which the implementation of the GoM’s recommendations was disappointing.
•The issues are well-known. The first is a pervasive sentiment in the armed forces that they are not formally involved in decision-making on defence planning and strategy. This perception is reinforced by the fact that the Service Headquarters are not within the Ministry of Defence; they are treated more like attached offices. This structure has led to cumbersome, opaque and antiquated decision-making processes, from administrative requirements to weapons acquisitions.
Changing face of conflict
•From an operational perspective, the concept of military conflict today extends beyond land, air and sea, into the domains of space, cyber, electronic and information. Effective defence preparedness requires a ‘jointness’ of the Indian Army, Indian Air Force and Indian Navy in incorporating these domains into their war-fighting strategies. It also requires a prioritisation of the weapons requirements of the forces and optimisation of their resource allocations based on a clearly defined national defence strategy.
•The GoM had recommended better efficiency by integrating the armed forces headquarters into the Ministry of Defence (MoD). It had also pitched for the appointment of a CDS, who could promote an integrated approach to inter-service prioritisation and resource allocation as well as a pooling of common structures to avoid unnecessary redundancies. The CDS was to administer tri-service institutions such as the Andaman and Nicobar Command. In today’s context, his charge would also presumably include the recently established tri-service space and cyber agencies. He would provide coordinated military advice to the Defence Minister, incorporating the perspectives of the individual services. He would develop the national defence strategy, which itself should flow from a national security strategy that factors in traditional and non-traditional threats as well as internal security requirements and external strategic objectives. This would be in collaboration with the civilian defence leadership of the MoD.
A thread of resistance
•All recommendations were accepted barring the one on the CDS. Opposition from sections of the armed forces and the bureaucracy and from a political party resulted in this last-minute decision. There was apprehension that a CDS would undermine of the authority of the three service chiefs over their forces. The establishment in many countries of theatre commands under the CDS reinforced this fear. The other concern was that an all-powerful CDS would distort the civil-military balance in our democracy.
•This opposition was based on misperceptions and “turf” considerations. Many democracies have the institution of a CDS or its equivalent, with varying degrees of operational control over their armed forces. It has not diluted civilian control over their governance. Instead, it has meant greater participation of the military in defence decision-making alongside the civilian bureaucracy, enhancing the coherence and transparency of policies. In almost every case, the appointment of a CDS has been a top-down decision, to which the system has subsequently adjusted.
Need for indigenisation
•The role envisaged for a CDS in India is that of developing multi-domain military strategies, strengthening tri-service synergies and enabling perspective planning. It is only after achieving jointness in training, exercises and infrastructure that the feasibility of regional commands can be explored in the specific context of India’s geography and the nature of its internal and external threats. The CDS can contribute to rational defence acquisition decisions, preventing redundancy of capacities among the services and making best use of available financial resources.
•While implementing this reform, we should also focus on the important objective of indigenisation. It is a shame that India is still among the top arms importers. This abject dependence on other countries, for weapons systems, components and even ammunitions, does not befit an aspiring great power. There must be procedures and practices to ensure that every acquisition is structured in a way as to strengthen our indigenous technological capacities, in turn aiding defence self-reliance.
•A corollary of the appointment of a CDS is integration of his establishment into the MoD without which he cannot meaningfully fulfil the role assigned to him. Eventually, the three Service headquarters would also need to be suitably integrated into the Ministry. It would require changing their current functional structure as well as amending the existing rules of business of the government. This was envisaged by the GoM, but when a decision on the CDS was deferred, action on it lost steam.
•In his announcement on the CDS, the Prime Minister mentioned past reports on defence reforms, the transforming nature of military conflict, the impact of technology and the need for modernisation, coordination and jointness. This leads to hope that the GoM recommendations of 2001 will be implemented. If carried out objectively, undistorted by turf considerations, this long-awaited reform would soothe frictions in civil-military relations and bring greater efficiency, transparency and accountability into decision-making on defence matters.
📰 ISRO arm begins search for PSLV makers
NSIL invites expressions of interest from one or more experienced companies to produce launchers
•NewSpace India Ltd, the new public sector space business company, on Friday launched a formal search for industry consortia which can regularly manufacture and deliver entire PSLV satellite launch vehicles for its parent, the Indian Space Research Organisation.
•It will initially outsource five PSLVs — Indian rockets that can lift light payloads to ‘low earth orbits’ some 600 km in space. NSIL has called a pre-bid meeting of potential parties on August 26.
•The four-stage PSLV is needed to place both Indian remote sensing satellites and small satellites of foreign customers to space.
Formed in March
•NSIL was formed in March this year to promote Indian space commerce. In its first tender it invited expressions of interest or EoIs from one or more experienced companies or consortia to produce the launchers end to end: their job starts from component procuring, electronics, to large stages and finally the assembly, integration and testing (AIT) of the vehicles. Selected parties can use ISRO facilities where required, it said.
•In the August 16 document titled ‘EoI for PSLV production by Indian industry consortium’, NSIL said, “With a target of producing 12 PSLVs per annum through Indian industry, NSIL/ ISRO, as a first step, is looking forward to [realising] 5 PSLVs,” through selected companies or consortia.
•“Upon successful and satisfactory completion of realisation of 5 PSLVs, NSIL/ISRO will enhance the scope to 12 PSLVs per annum under a separate contract.”
Two a month
•At the Bengaluru Space Expo held a year ago, ISRO Chairman K. Sivan had urged industries to relieve ISRO of the manufacturing burden, saying the space agency must do 59 launches by 2021 and needed a PSLV strike rate of two a month.
•Of the over ₹6,000 crore sanctioned last year for the cost of 30 PSLVs required during 2019-24, 85% of the money would go to industries, he had said.
•ISRO currently sources separate rocket parts from around 500 big and small vendors and does the AIT itself at its facilities in Kerala, Tamil Nadu and Andhra Pradesh.
Core job
•For almost a decade, it has been planning to hand the production over to public and private industries and itself focus on its core job of space R&D.
•On the satellite side, groups of industries are already helping ISRO in AIT at the Bengaluru-based U.R. Rao Satellite Centre and have produced a couple of mid-sized satellites.
•ISRO also has two increasingly more powerful launchers in that order — the GSLV and the GSLV-Mk III, used to lift 2,000 kg and 4,000 kg communication satellites to higher orbits.
📰 Making CSR work: On Companies Act amendments
Non-compliance by corporates should be decriminalised and made a civil offence
•It was first encouraged as a voluntary contribution by business; six years ago it evolved into a co-option of the corporate sector to promote inclusiveness in society and now, corporate social responsibility or CSR has become an imposition on India Inc. Key amendments to the relevant sections of the Companies Act in the last session of Parliament have now made non-compliance with CSR norms a jailable offence for key officers of the company, apart from hefty fines up to ₹25 lakh on the company and ₹5 lakh on the officer in default. Finance Minister Nirmala Sitharaman is said to have assured representatives of India Inc. when they met her last week that this amendment will be reviewed. Yet, it is curious that the government rushed through with amendments on the CSR law even as a committee constituted by it was finalising its report on the same subject. As it happened, the committee, headed by the Corporate Affairs Secretary submitted its report on August 13, well after Parliament had passed the amendments. On the specific issue of penalties, the committee has proposed that non-compliance be de-criminalised and made a civil offence. “CSR is a means to partner corporates for social development and such penal provisions are not in harmony with the spirit of CSR,” the committee’s report says and rightly so. CSR should not be treated as another tax on businesses.
•Every company with a net worth of ₹500 crore or turnover of ₹1,000 crore or net profit of ₹5 crore should spend 2% of the average profits it made over the previous three years on social development. The experience since this provision was operationalised in 2013 has been mixed. Filings with the Ministry of Corporate Affairs show that in 2017-18, only a little over half of those liable to spend on CSR have filed reports on their activity to the government. The other half either did not comply or simply failed to file. The average CSR spend by private companies was just ₹95 lakh compared to ₹9.40 crore for public sector units. These are early days yet, and compliance will improve as corporates imbibe CSR culture fully. The committee’s suggestion to offer a tax break for expenses on CSR makes sense as it may incentivise companies to spend. It has also recommended that unspent CSR funds be transferred to an escrow account within 30 days of the end of the financial year. It should be recognised that CSR is not the main business of a company and in these challenging times they would rightly be focusing their energies on the business rather than on social spending. The government should be careful to not micromanage and tie down businesses with rules and regulations that impose a heavy compliance burden. Else it might end up with the opposite of what it intends — to rope in corporates as citizens to promote social inclusion.
