M A I N   N E W S

CSR spending will help firms connect with people: Pilot
Sanjeev Sharma/TNS

Social measure India is the only country in the world where the CSR norms have been made part of the statute to make 2% of profits above a certain threshold to be spent on CSR activities like education, health, drinking water etc The CSR norms come at a time when there is a perception of corporate greed due to several scams in the country and it is a form of giving back to the society CSR activities would benefit the companies themselves as they can foster better relations with society in the local region

New Delhi, August 13
Corporate Affairs Minister Sachin Pilot has clearly said that the new Companies Bill has made it mandatory for companies to spend 2 per cent of profits on Corporate Social Responsibility (CSR) which will help companies to connect more with the communities.

In an interview with The Tribune, Pilot said the CSR initiatives in the recently passed Companies Bill would give confidence to the people that when a company is profitable it will give some of the profits back to the people.

India is the only country in the world where the CSR norms have been made part of the statute to make 2 per cent of profits above a certain threshold to be spent on CSR activities like education, health, drinking water, environment protection, hygiene, sanitation, village adoption, skill development and renewal sources of energy.

Pilot said though the companies were already doing CSR activities in their own way but now under the Companies Bill it has been organised in a structured format and they can showcase their social activities to the community. The threshold has been fixed at Rs 1000 crore in revenue and profit of more than Rs 5 crore for three years. This will include MNCs set up in India. Pilot said the activities should be project driven and transparent and they will have to disclose on the ministry website.

The passage of the Companies Bill which replaces the older version of 1956 is a major achievement for the UPA government as it had been in the works for several years and will drive the reform agenda and boost investor sentiment. Pilot added that the subsequent rules for the Bill will be put on the Internet to get suggestions from all quarters.

The CSR norms come at a time when there is a perception of corporate greed due to several scams in the country and it is a form of giving back to the society. There also have been several agitations on land acquisition throughout the country on several large projects and these measures will generate goodwill with the local communities.

Pilot said CSR activities would benefit the companies themselves as they can foster better relations with society in the local region. He stressed that the activity will be left to the discretion of the companies who will do self disclosure of activities and there will be no inspector raj. Since several corporate houses have in house structures for philanthropy, companies will be free to use their own foundations, trust or NGOs to carry out these activities.

Pilot said there were provisions in the Bill to improve corporate governance and reduce instances of fraud which will give confidence to the investors.