Companies BIll 2011 (India) and Solar

The recent news has been the India has made the Companies Bill 2011 into law; after a long discussion and wait. 

 

The new law mandates companies with a net worth of Rs 500 crore ($100 million) or more, or turnover of Rs 1,000 crore ($200 million) or more, or a net profit of Rs 5 crore ($1 million) or more during the past three financial years must spend at least 2 percent of their average net profits from the three preceding years on CSR (corporate social responsibility) initiatives.

 

This stipulation makes India the fist country in the world to legally mandate corporate spending on social welfare.

 

CSR activities recognised under the Bill include: Eradicating extreme hunger and poverty; Promotion of education; Promoting gender equality and empowering women;   Reducing child mortality and improving maternal health; Combating HIV, AIDS, Malaria and other diseases; Ensuring environmental sustainability; Imparting employment enhancing vocational skills;   Social business projects; and Contribution to certain funds. The company is to give preference to local areas when formulating its CSR policy.

 

For companies in the solar sector; especially solar panel manufacturers can easily provide solar panels to NGOs, schools, villages to bring in much needed power to the downtrodden; helping the much needed and also fulfilling CSR mandate. 

In addition, this helps them in their branding exercise and trial processes. 

 

Companies not in the solar sector can also do the same; encouraged by solar companies. 

 

This applies for biogas, LED lights, and other such technologies that can cover “Ensuring environmental sustainability”; one of the areas under CSR. Though some others can also be used (indirectly) to promote renewable energy and cleantech technologies. 

 

The CSR law has the ingredients to boost India’s off-grid and cleantech space at a time when MNRE off-grid funds are drying off or are slowing down. 

 

The implementation will take some time and as usual the industry will come up with learning through new models of application. 

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2 Responses to Companies BIll 2011 (India) and Solar

  1. If you have closely monitored CSR activities, you’ll notice how some companies ACTUALLY spend their CSR initiatives for their own (or their top management’s) gain.

    Why do we need either subsidies or compulsory mandates from the Govt. in order to push solar/re forward? Why don’t we just allow these sectors to learn and grow on their own? If solar energy cannot achieve grid parity, there is no point in hand-holding it like this. That sector will have to struggle and evolve on its own. Over-dependence on subsidies will only kill it or make it a puppet that is controlled by a few people.

    Are we going back to socialism? The Nehruvian Socialism that we rejected? We might as well bring back the licence raj era… The golden years!

    This is not an opportunity – this is INTERFERENCE.

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  2. Hello “Destination Infinity”…thank you for taking out time to read the blog.

    Yes, I agree with you that some companies cheat but this is not limited to CSR but across all other areas as well…

    I also agree that any industry cannot sustain itself for long on subsidies and incentives….

    The idea of the blog was not to encourage or discourage the government schemes; but analyzing the impact of what the new bill and how this will further drive some part of industry growth

    It will be nice to know more about you and your work.

    Like

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