Social audit will be an important tool to ensure the effective implementation of corporate social responsibility (CSR), Nirmala Sitharaman, minister of state for commerce and industry, finance and corporate affairs, said on Wednesday.

Addressing a national seminar on CSR called ‘Shreshth Bharat’ organised by Indian Social Responsibility Network (ISRN) in Delhi, she said, the government can only go a certain distance to verify how and on what the corporate houses are spending. She added that social networks can play an important role in social audits of CSR implementation.

She said, “The ministries can go back to companies to see if they have spent and how they have spent on CSR. We cannot question corporate houses … [we cannot say] if they haven’t spent then give us the money (reserve for CSR spending). Social audit will ensure that funds are properly utilised.”

Sitharaman said the legislative mandatory framework for CSR has just come but, in any case, Indian public institutions have had a long tradition of taking up CSR as part of their agenda. She said the Act came into force on April 1, 2014, and this is the right time to talk about it and to reach out to the corporate sector.

Lalitha Kumarmangalam, chairperson, national commission for women and also of ISRN, said this network will be a bridge between the corporate sector and the NGOs so that the two can meet in a sustainable manner.

Emphasising the need to focus on making India open defecation free through CSR, she said it is not just about building toilets but social awareness also needs to be raised to ensure that people use toilets. She also said it is important to take gender on board and to ensure that usable toilets for women are built along national highways, railways and other public places. 

Sitharaman also launched a book on ‘A guide to corporate social responsibility - beyond funding’ on the occasion.

[Governance Now is a media partner for the event.]