Every eligible company has to constitute a Corporate Social Responsibility Committee of the board consisting of three or more directors, out of which at least one director shall be an independent director
IndiaCSR News Network
BHUBANESWAR: With the eligible corporates mandated under the new Companies Act to spend two percent of their net profit for corporate social responsibility (CSR) activities, experts pitched for partnerships with civil society for effective implementation of corporate sponsored peripheral development work at the ground level.
“The companies should outsource the CSR activities to civil society sector instead of creating an army of people for carrying out the CSR activities. They should allow not for profit companies to actually execute the programme at the ground level,” said Bhaskar Chatterjee, director general and chief executive officer, Indian Institute of Corporate Affairs at a multi-stakeholder dialogue on corporate social responsibility (CSR), here, jointly organised by Indian Institute of Corporate Affairs (IICA) under Union ministry of Corporate Affairs, Centre for Youth and Social Development (CYSD) and National Foundation for India in collaboration with Unicef.
It may be noted that the new law mandates that all companies, including foreign firms, with a minimum net worth of Rs 500 crore, turnover of Rs 1,000 crore and net profit of at least Rs 5 crore, spend at least two percent of their profit on CSR. Every eligible company has to constitute a Corporate Social Responsibility Committee of the board consisting of three or more directors, out of which at least one director shall be an independent director.
Out of 1,100,000 companies in India, about 16,000 eligible companies are expected to pump in Rs 14,000-16,000 crore in the CSR activities. India is the only country in the world with legislated corporate social responsibility (CSR).
He stressed on bridging the trust deficit between the corporate and civil societies. Chatterjee said, the CSR must compliment and supplement the efforts of state and central governments. The corporates should partner with the good NGOs for undertaking the CSR activity, suggested Amitabh Behar, executive director, National Foundation for India.
“People’s participation in CSR is important as they are the key stakeholders in the process. In addition to that, corporates, civil society organisations, state and central government should join hands to make CSR reach to the last mile. The state has undertaken a slew of measures in the field of CSR,” said chief secretary Gokul Chandra Pati at the event. Stakeholders should work collectively with a positive mind-set and the approach for implementing CSR should be empowerment-based, but not charity-based.
Corporates should join hands with government for last mile connectivity in CSR field, Sanjay K Panda, Union Textile Secretary said. Speaking on the occasion TV Narendran MD Tata Steel, India and South East Asia said, corporate should bring in innovative processes to add value to CSR activities. He said, Tata Steel is spending around Rs 200 crore for the CSR activities every year.
Stressing on following best practices and standards in CSR Jagadananda, mentor, CYSD said, “Despite Odisha having a stable political environment and a growth rate of more than 8.5 per cent (above the national average) during the last decade, the economic growth of the state has not been matched by a commensurate positive transformation in the society at large.” The new act would provide an impetus for more inclusive growth in the state, he added.