30% of CSR spend to be made mandatory for Swachh Bharat

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NEW DELHI: The government expects to garner close to Rs2 lakh crore of funds over the next three years from India Inc by making 30 per cent of their spend on corporate social responsibility (CSR) mandatory in projects such as ‘Swachh Bharat’.

The proposal of making 30 per cent of CSR spends on Swachh Bharat is likely to be announced by the Prime Minister Narendra Modi in May, when the ruling government celebrates its second anniversary, a senior official told BusinessLine.

“The government is evaluating lot of time-bound projects, which are being identified right now and for that it needs lot of funds. It (government) is eyeing to mandate 25-30 per cent of CSR spends by corporates spending on such projects,” a senior government official close to the development said.

Even the companies, which are already doing a lot of work through their CSR activities, would be asked to mandatorily take up certain projects, for this purpose. For example, a company doing CSR towards sewage or clean drinking water in a few cities would be made mandatory to do them in other cities too.

To encourage the states and various departments, the government is also planning to give away awards from time to time so that there are competitions between states and states and district to districts, the sources said.

As part of the Companies Act, 2013, companies have to spend at least two per cent of their net profit on CSR and Rs1000s of crores are spent every year by them. However, with the Centre focussing on a lot of projects such as ‘Digital India’, ‘Make in India’, there needs lot more funds towards its flagship programme – Swachh Bharat Mission.

The Centre has already raised over Rs2,500 crore from the Swachh Bharat Cess as against a target of Rs3,000 crore. It plans to raise Rs 10,000 crore from the cess in the next financial year.

The cess, which was introduced in November last year, is imposed at 0.5 per cent on all taxable services to finance and promote initiatives under the Swachh Bharat Mission.

“It is imaginable how much rupees would be spent on such projects over the next few years by making 30 per cent CSR spent on certain projects. Clearly, the Prime Minister has some vision and if successful, it will be a big political manifesto on his achievements for the next general elections in 2019,” said another government official.

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However, one has to wait for the Prime Minister’s announcement to see whether it (30 per cent CSR on Swachh Bharat) is made mandatory or not.

Meanwhile, Minister of State of Finance Jayant Sinha had recently said that total donations received including interest, for Swachh Bharat Kosh is Rs369.74 crore. Of this, Rs359.2 crore has been released for construction of toilets.

“The fund utilised under Swachh Bharat Mission (Gramin) since October 2, 2014 is Rs6,411.05 crore including Rs185.22 crore spent on print and electronic media,” he had said in response to a question in the Lok Sabha last month.

(Business Line, March 27, 2016)

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