iastoppers-corporate-social-responsibility
Editorial Notes

Editorial Notes 26th September 2016

Delhi University Photocopying Case; NGO; Corporate Social Responsibility; India-Russia Ties
By By IT's Editorial Notes Team
September 26, 2016

Contents

Polity & Governance

  • Legal overreach

Economy

  • CSR has to be made more meaningful

Bilateral & International Relations

  • China, not Pakistan, will test India-Russia ties

Science & Technology

  • On the right to photocopy

 

Polity & Governance

GS (M) Paper-2 Topic: “Government policies and interventions for development in various sectors and issues arising out of their design and implementation.”
GS (M) Paper-2 Topic: “Development processes and the development industry- the role of NGOs, SHGs, various groups and associations, donors, charities, institutional and other stakeholders”

Legal overreach

Introduction:

The recent amendment of the Lokpal Bill requires NGO office bearers to declare all information, including their and their families’ personal assets.

iastoppers-ngo

The Government notification also stipulates that those handling day-to-day operations of NGOs will be treated as public servants if the organisation receives Government funding of more than ₹1 crore or foreign funding of ₹10 lakh a year.

Rationale behind the move:

  • There is a large number of NGOs operating in India and most of them do not even file income tax returns. Many of them also receive foreign funds and are alleged to be violating FCRA
  • With this move Government seeks to bring transparency in their working along with more stringent monitoring

Arguments against the move:

  • The new law will lead to many passionate private sector individuals to sever their association with non-profits, which will hurt the larger social good.
  • It is being seen as abridging privacy rights.
  • Non -Profits have delivered social goods to the last mile as seen in Akshay-Patra, Grain Bank etc. This move can lead to decline in their fund-raising capability, thus hampering socio-economic welfare

Suggestions:

  • The Government should consider a different approach without violating a person’s Right to Privacy; one that looks at strengthening governance at the institutional level without bringing its leaders and their families under public scrutiny
  • Departments such as Income Tax can seek specific information from members of the NGOs where dubious links or activities are suspected. The Government can certainly look at engaging experts from the private sector to act as third party regulators or auditors to improve their oversight on non-profits.
  • Finally, the Centre needs to engage with both, private sector and non-profits to mutually decide upon the steps to be taken to develop adequate measures to tackle corruption rather than respond peremptorily on account of a few.
[Ref: The Hindu]

 

Economy

GS (Mains) Paper-3: “mobilization of resources”

CSR has to be made more meaningful

Introduction:

Indian companies are not serious about Corporate social responsibility (CSR) despite the mandate being stipulated in Section 135 of the Companies Act, 2013.

iastoppers-corporate-social-responsibility

CSR ambit:

The CSR ambit is comprehensive in that the Government has recognised major areas for spending:

  • Promoting education,
  • Promoting gender equity,
  • Ensuring environmental sustainability,
  • Promoting sanitation,
  • Promoting availability of safe drinking water,
  • Eradicating hunger,
  • Poverty and malnutrition,
  • Promoting preventive healthcare,
  • Protecting national heritage,
  • Spending for the benefit of armed forces veterans, war widows and their dependents, and
  • Contributing to the Prime Minister’s Relief Fund.

Mandatory spending under CSR as per the Companies Act, 2013:

The Act requires a class of companies (companies with net worth of ₹500 crore or more / with annual turnover of ₹1000 crore or more / with a net profit of ₹5 crore or more) to mandatorily spend 2 per cent of the average net profit of the preceding three years on CSR activities, establish a CSR committee, and report CSR activities.

  • However, in fiscal 2015, smaller listed companies (outside the ambit of the CSR legislation) have relatively spent more on CSR than bigger ones (Crisil CSR Yearbook 2015)
  • Even though CSR expenditure is not eligible for tax deduction (according to Finance Act 2014), certain areas of investment (eligible for tax deductions) are attractive to companies.

Reasons for apathy:

460 companies have cited trivial reasons for either not spending on CSR, or for having spent less than the minimum required. The reasons for this were:

  1. The current fiscal was the first year of implementation of the CSR mandate
  2. Adoption of long-term social projects
  3. Difficulty in finding an implementing agency.
  • The first and third reasons are unacceptable because information about CSR legislation has been in the air since two years after the formulation of the Companies Act 2013.
  • The second reason is worthy enough to be given a second thought, since long-term investment in social projects leads to benefits over multiple periods and will therefore, fit into the description of ‘Capex’.
  • Presently, capital expenditure is not tax deductible. Capex on CSR can be deferred over the period of benefit; the amortisation method needs to be worked out and explicitly stated in the legislation.

Suggestions:

As per the author,

  • For effective CSR implementation, firstly, there is a need to craft an industry-specific CSR mandate by setting weightage to important areas such as environmental sustainability.
  • Companies are subject to varied environmental and social risks depending upon the industry they belong to.
  • Companies belonging to polluting industries should not be allowed to simply write out a cheque for the stipulated CSR expenditure for the sake of compliance.
  • The negative environmental externalities generated by such businesses can be neutralised only by setting mandatory weights/proportion of CSR expenditure to be channelized towards eco-efficiency based projects and investments focused upon ecosystem conservation.
  • Crafting an industry-specific CSR mandate requires the collaboration of the MCA, the environment ministry, and the Central Pollution Control Board to come up with an industry-wise toxic release inventory (TRI) along the lines maintained by the US Environmental Protection Agency (EPA).
  • Creating this database will not only facilitate the task of earmarking mandatory investment in environmental sustainability, but also help identify the right projects for companies so that they can contribute to sustainable development goals.
[Ref: Business Line]

 

Bilateral & International Relations

GS (Mains) Paper-2: “Effect of policies and politics of developed and developing countries on India’s interests”

China, not Pakistan, will test India-Russia ties

Introduction:

Some in India have expressed panic that Russia is holding military exercises with Pakistan.

iastoppers-china-not-pakistan-will-test-india-russia

Views:

  • The world’s militaries are utterly promiscuous when it comes to holding bilateral exercises — India has held exercises even with China.
  • The Soviet Union had an adversarial relationship with Pakistan, but Russia has no reason to maintain such a posture.
  • India itself has long since diversified its military and political relationships away from Russia and is no position to complain too much.
  • Sensibly, India has preferred to draw red lines on how far the Russia-Pakistan relationship should go. For example, this includes Russia not selling major offensive weapons platforms — no warships or fighters.

India-Russia ties in aftermath of Cold-war:

  • The greatest weakness is the lack of an economic relationship that encompasses the Indian private sector. India’s odd defence purchase and equity stake in a Siberian oil or gas field are substitutes for rather than the basis of a strategic relationship.
  • This is exacerbated by the accident of geography, which means a land route and even sea links between the two countries are difficult, forcing them to concentrate their energies on other nations. People-to-people contacts are parlous.
  • Cooperation in the defence sector has been the bedrock of ties and now there is a concerted effort to diversify trade to cover a wide range of sectors
  • Two highlights from the Moscow summit was the focus on hydrocarbons and terrorism. Other sectors that are getting push are trade in diamonds, pharmacy, mining and tourism.

Conclusion:

  • The main challenge facing the two countries is the slow but steady drift of Russia towards the strategic shores of China
  • Russia’s closeness to Beijing, especially in the military sphere, though born of economic necessity, is a genuine concern for New Delhi.
  • The danger is that the present Russia-Pakistan exercises may be seen through that prism and fray a 60-year bond to the breaking point. This is what Russia must be wary of and be warned about.
[Ref: Hindustan Times]

 

Science & Technology

GS (M) Paper-3 Topic: “Issues relating to intellectual property rights”

On the right to photocopy

Introduction:

Recently, the Delhi High Court dismissed the copyright infringement petition filed by three international publishers against a photocopy shop located in the Delhi University premises (The Chancellor, Masters and Scholars of the University of Oxford v. Rameshwari Photocopy Services).

iastoppers-photocopy

The court ruled that making course packs for suggested reading for students by photocopying portions of various prescribed reference books does not violate the copyright of the publishers.

Right to Reproduction:

  • Section 14 of the Copyright Act, 1957, grants a bundle of exclusive rights such as the right to reproduction on copyright owners for commercial exploitation of the work.
  • Photocopies made in violation of Section 14 thus constitute infringement unless it is listed under Section 52 as an act not constituting infringement.
  • The judgment holds that if any provision of the Act permits any person other than the owner to reproduce any work or substantial part thereof, such reproduction will not amount to infringement.

What exactly the Section 52(1)(i) of the Copyright Act says?

The nature of Section 52 of the Copyright Act is such that any act falling within its scope will not constitute infringement.

Section 52(1)(i) allows for the reproduction of any work

  • By a teacher or a pupil in the course of instruction; or
  • As part of the questions to be answered in an examination; or
  • In answers to such questions.

Analysis of Section 52(1)(i) of the Copyright Act:

  • Section 52(1) (j) uses terms such as “staff and students of an educational institution” whereas Section 52(1) (i) uses “teacher or a pupil in the course of instruction.”
  • According to Justice Rajiv Sahai Endlaw, the words “in the course of instruction” would include “reproduction of any work” while the process of imparting instruction by the teacher and receiving instruction by the pupil continues during the entire academic session
  • Hence it would be fair dealing if the students click photographs of each page of portions of the prescribed book.

Suggestions:

  • Copyright must increase and not impede the harvest of knowledge. When the judgment reads, “Copyright is to motivate the creative activity of authors in order to benefit the public”, what is left for the copyright owners?
  • Copyright holders invest considerably in creating works. This should not be ignored while interpreting Section 52(1)(i) as a license for reproducing unlimitedly everything prescribed in the suggested reading
  • When the University is entitled to free photocopy of 3,000 pages every month, can the possibility of commercial interest be should not be overruled. It also does not comply withArticle 13 of the TRIPS – these exceptions must confine to “special cases which do not conflict with a normal exploitation of the work and do not unreasonably prejudice the legitimate interests of the right holder”
  • Universities are expected to cater to students’ reading requirement without prejudicing copyright holders’ legitimate economic interests. The students’ demands can be met reasonably by permitting reproduction of reasonable excerpts.

Conclusion:

  • Undoubtedly, the judgment, which is a breakthrough in the Indian copyright jurisprudence, is a major victory to access to education in a developing country like India.
[Ref: The Hindu]

 

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  • yugvirsingh

    nice articles for mains. thank u so much

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