CSR spending may not touch Rs 20,000 crore mark

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IndiaCSR News Network

KOLKATA: Will CSR( Corporate Social Responsibility) spending touch the projected spending of Rs 20,000 crore as has been reported ever since the new law enacted in last April 2014 mandating companies to spend 2% of their profit on CSR. As the year draws close on this April 1, 2015 , in another two months, we will know the exact amount of spending. According to the insiders in the industry, the figure may not reach anywhere close to the projected Rs 20,000 crore. It is expected to be just one third of what is projected, observed many CSR Professionals who have assembled in Kolkata at a Greentech Foundation’s two day national meet on Sustainability & CSR for Inclusive Growth . 70 per cent of these 16352 companies are not so large is the reason cited by some of the professionals, for the CSR Spend to be around Rs 5000 crore.

According to Indian Institute of Corporate Affairs, around 16,352 companies fall within the purview of Section 135 of the Companies Act. Around 20,000 crore in total will be spent by Corporates each year on CSR. Around 30,000 Directors of Boards will be directly involved.

The CSR Roll Out also demands a large number of CSR Professionals. Nowhere in the world available are qualified CSR Professionals. We need 30,000 CSR Professionals in India . Hence Indian Institute of Corporate Affairs is offering a 9 months online training program. It was the world’s first Professional Course being offered by us on CSR. The first batch of 200 trained CSR professionals will be out into the market this July, Bhaskar Chatterjee, DG & CEO of Indian Institute of Corporate Affairs(IICA), Govt of India informed.

Currently there are approximately 3.3 million registered NGOs in India. Probably around ten lakh fully functional and ready to face implementation challenges are available. The average absorptive capacity of NGOs is around Rs 20 lakh annually. Hence, around 1,00,000(one lakh) NGOs are required at the vert least to carry forward CSR agenda in the country, observed Bhasker Chatterjee.

Adding further Chatterjee stated that we need to create an NGO Hub which will, inter alia empanel credible implementing agencies. Need to create a shelf of projects from which companies and implementing agencies may choose.

On the day two, the man behind the CSR, Bhaskar Chatterjee, DG & CEO of Indian Institute of Corporate Affairs(IICA), Govt of India addressed the gathering of 200 strong CSR and Environment experts and he also moderated a Panel Discussion on CSR Opportunities and Challenges.. Speaking on the occasion he said, 16000companies out of 6 lakh registered companies in India who fall under the new legislation will file their first ever CSR Report in two months from now . That will give us the macro view of the entire CSR initiative in the country. CSR is the new game changer. Once the reports ware posted on the websites of the respective companies and submitted to the IICA by this April, we will compile all those reports and submit the macro view of the same to the Ministry and Parliament, informed Bhaskar Chatterjee.

Speaking further he gave clarifications on lot of ambiguities, doubts in the minds of the CSR professionals. He said companies need not do CSR activities in and around their manufacturing and production centres. They can implement their CSR projects anywhere tin India. In India only 16% of total industries are into manufacturing sector and remaining 84% is non manufacturing. Hence this flexibility. They can carry out their CSR projects wherever they want within India.

First year is crucial,. We don’t expect all the companies to spend the mandated 2%. If so they need to write an explanation to the ministry. The suggested areas of activities under the section 7 of the law also broadened. Three new areas Urban Slum Development, Swachch Bharath and Clean Ganga Project are added recently he said.

The companies who do not comply with the rules laid down in the law may face severe punishment, he said.

Chatterjee is also clarified that what is CSR and What is not. Any CSR activity which is not rupee measurable is not a CSR Activity. Those activities which do not benefit the poor and backward sections of the community are not CSR activities. The benefits extended to employees will not count as CSR. Funds/moneys deposited in Central or Government accounts will not count as CSR. . Government Programs and Initiatives shouldn’t be duplicated. Those can be complimented and or supplemented. Also the programs or projects undertaken outside India will not count as part of CSR Projects, Chatterjee said. Pure philanthropy or mere donations are no longer counted as CSR. he informed to the packed audience. Also those activities which are in compliance with any regulation or law will not be treated as CSR project.

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(http://timesofindia.indiatimes.com/business/india-business/CSR-spending-may-not-touch-Rs-20000-crore-mark/articleshow/46055040.cms)

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