NEW DELHI: The government and industry must alter mindsets and arrive at a consensus to bring inclusive growth by participation of corporate sector, minister of state for corporate affairs R.P.N. Singh said today.
The Companies Bill 2009 has proposed that companies should earmark two per cent of their average profit in past three years for corporate social responsibility (CSR) activities and inform shareholders about the policy adopted in the process.
“We would like to work with corporates and arrive at a consensus rather than put a gun on their heads,” said Mr Singh while addressing a conference on corporate community investment organised by The Associated Chambers of Commerce and Industry of India (ASSOCHAM).
This is essential as 43 per cent of population lives below the poverty line despite corporates propelling the Indian economy at a fast pace, he added.
The suggestion of earmarking a portion of company’s profit for CSR was floated by the Parliamentary Standing Committee on Finance which scrutinised the Companies Bill. The industry believes it should be allowed to monitor implementation of CSR activities itself without government intervention.
Ms Preeti Malhotra, chairperson of ASSOCHAM’s national council on corporate affairs, said India Inc is increasingly looking at community development not merely as a charity or CSR work but as a strategic social investment which will finally lead to improvement in competitiveness, image building and enhancement in shareholder value.
It will develop employees’ morale and loyalty, and finally expansion of market base with brand equity, she added.
In a message, ASSOCHAM’S secretary general D.S. Rawat said there is a growing acceptance among corporates that community development cannot be seen in isolation and is no longer a task confined to the government alone. Investing in community development building and adding to the competitiveness of industry itself, he said.
Mr Amod Kanth, general secretary of Prayas, said the three operating arms of corporate community investment are the government, panchayati institutions and free market economy. The last is yet to understand the concept of CSR, he said.
Mr T.M. Bhasin, chairman and managing director of Indian Bank, said banks and most public sector units are already spending more than two per cent of profits for CSR activities.
India has the third largest number of billionaires – 69 who are collectively worth 280 billion dollars. Still, 45 per cent of children below five years of age lack elementary healthcare and suffer with maltrition.
US-based Warren Buffett and Bill Gates are coming to India in July to request Indian billionaires to give away a large part of their wealth in their lifetime as they have done. Experts say the society should not look at high achievers with hatred and envy, and accept that an open capitalist society is essential for economic growth and societal well being.