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Admin 2019-08-17

17th Aug 2019: The Hindu Editorial Analysis

1) Making CSR work: On Companies Act amendments


  • 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 offense 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 finalizing 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-criminalized and made a civil offense. 
  • “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 operationalized 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 has 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 incentivize 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 recognized 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 (to persuade or bring around) corporates as citizens to promote social inclusion.

2) Justice for the mob: On Pehlu Khan case verdict


  • It is a sign of the times that vigilante mobs can get away with daylight murder. Even after visual evidence becomes available; and even when the victim names his assailants in a dying declaration. 
  • The acquittal of all those charged by the Rajasthan police with beating dairy farmer Pehlu Khan to death on April 2017 is a stark reminder that there is a humongous gap between capturing video footage of a man being beaten up and bringing the culprits to book.
  • The Additional District Judge of Alwar has given the benefit of doubt to the six men charged with Khan’s murder. A principal reason given is that the six persons named by Khan were not charge-sheeted by the police. It seems that the derailment of the prosecution case began early.
  • Based on mobile phone call records and the statement of staff at a cow shelter, the police gave a clean sheet to the named suspects and booked a different set of people, including three minors. The police failed to conduct an identification parade, while there was an apparent contradiction between government doctors declaring that the victim died of injuries and a private hospital’s claim that the cause was cardiac arrest. 
  • It is not difficult to surmise (suspect) that infirmities were built into the case in advance. The court also need not have held inadmissible the footage of the incident, as the Supreme Court had ruled last year that authentic and relevant electronic evidence can be accepted even in the absence of the required certification under the Evidence Act.
  • Last year, Jharkhand managed to obtain convictions in two cases of lynching, but the Pehlu Khan lynching case had emblematic (exemplary) significance. It was vital that it was properly investigated and the culprits convicted.
  • Unfortunately, the wholesale (indiscriminate) acquittal (final judgment) is a setback to combating the rampant vigilantism of our times. Each such incident imperils (pose a threat to) India’s image as a modern democracy. There is ample evidence to suggest that the institutional bias in favor of cow vigilantes is working against the interest of justice. 
  • The CID-Crime Branch took over the case two months after the incident and filed a charge sheet. That charge-sheeted were granted bail not long after. Even after the change of regime late last year, the police obtained permission to prosecute two sons of Pehlu Khan for transporting bovines in violation of State law. 
  • This indicates the assiduity (diligence) with which cattle protection laws are implemented, while lynch mobs in the garb of cow protectors are treated with kid gloves. The Rajasthan Chief Minister, who recently got a new expansive law enacted to punish lynching, has promised to take the matter on appeal.
  •  A mere appeal may not suffice; orders for a fresh investigation and trial - one that would lead to the formal indictment (charges) of all those responsible for the murderous attack - may be needed to restore a sense of justice.

Source: The Hindu, Google Images