Today in India some of corporate leaders are recognizing that our business leaders and corporates need to transform their me-centered way to a me-and-society-centered way. India needs collective mindset to address the socio-economic issues to explore the opportunity of emerging economics.
Diversity and Societal Issues
India is a diversity-driven region and it has a variety of issues. We need innovative thoughts on solving societal problems, and it needs to be encouraged. We need more and more money and collaborative efforts to find new ways for our fellow citizens who are living in deprivation for hundreds of years.
Empowerment and Equality
We need a new India with no poverty and empowered people. The role of business in society is always good. Bringing equality should be the prime work of people, institutions, and business. CSR should be seen as an opportunity for bringing equality and creating opportunities for the deprived.
Role of Business in Empowerment
The role of business in empowering people must be encouraged, and society must give more and more space to the business world to do that. India is a great democracy and it demands togetherness.
Corporate Social Responsibility Mandate
In our country, around 14,000 companies are required to spend on various social projects under Section 135 of the Companies Act. As per law, a company should spend 2% of its profit on social developmental work from the current fiscal year if it has a turnover of Rs 1,000 crore or more, or net worth of Rs 500 crore or profit of Rs 5 crore and more. The ministry has provided a list of items under Schedule 7 that are covered under the law.
Increasing Social Spending by Corporates
It is a good sign that various organizations in India are spending more than 2% of their profit annually on social work. Now, Indian corporates are thinking of spending 10% of their profit on social work.
Leading by Example
It is a very much welcome move that Mindtree Ltd, the Bengaluru-based information technology (IT) outsourcing company, has recently asked its shareholders to allow it to spend 10% of profits, or up to Rs. 150 crore a year, on corporate social responsibility (CSR).
Advocating for Change
Dr. Huzaifa Khorakiwala, Director of Wockhardt Ltd and CEO of Wockhardt Foundation, proposed this idea at a CSR forum in New Delhi last year, stating that CSR spent of 2% of profit as provided under the current statute for undertaking corporate social responsibilities is too little and therefore, its ceiling should be raised to 10% of the total turnover of the corporate.
Urging for Increased Allocation
Speaking at a panel discussion organized by Business Standard this year in January, Infosys co-founder NR Narayana Murthy has also urged the top 100 Indian companies could allocate an additional 8% “as against the current 2% of the profits earmarked for corporate social responsibility” under Section 135 of the Companies Act. He said, “Let us be very clear, being rich in a poor country is not much fun. This may seem a little bit outlandish, but I think these are the kind of discussions we must have.”
About the author
Rusen Kumar is Founder of India CSR Network. He is a award wining knowledge entrepreneur
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