MUMBAI: The Indian Institute of Corporate Affairs (IICA) said on Wednesday that donations to government contingency funds, such as the Prime Minister’s relief fund, won’t be treated as corporate social responsibility (CSR) expenditure if more companies opt for this route merely to show their participation in this on paper.
It makes no sense to route CSR spending to these funds as against the objective-oriented project model recommended by IICA, said Bhaskar Chatterjee, IICA deputy general, speaking on the sidelines of a seminar organized by the Federation of Indian Chambers of Commerce and Industry (FICII).
He said the objective of CSR funds was to make a change in the social scenario of the country and merely routing this money to national funds may not lead to this.
Chatterjee also said that the IICA had a directory of about 7,000-8,000 companies in India that are eligible for the enforcement of Section 135 of the new Companies Bill that makes it mandatory for corporations with an average turnover of Rs500 crore and more for the past three years to invest at least 2% of the profits into CSR.
“IICA’s first priority is to compile all the annual reports provided by the companies to get visibility on the national picture of CSR for the first time,” Chatterjee said.
The Lok Sabha passed the new Companies Bill. It is to be taken up in the Rajya Sabha during the monsoon session.