The Corporate Social Responsibility (CSR) rules in the Companies Act, 2013 will forever change the way CSR is conducted in India and throughout the world. Beginning April of 2014, large and medium-sized Indian companies will be required to spend 2% of their profits on charitable causes. This represents both a challenge to be managed and an opportunity to be embraced by the more than 16,000 registered companies that will be affected by the law.
In passing this law, the Ministry of Corporate Affairs recognizes that corporates not only have the resources but also capacies and skills that enable them to spearhead social change in ways that are beyond the reach of both governmental and social sector organizaons. Instead of increasing corporate taxes by 2%, the government decided to leverage the exisng track record of India Inc. to catalyze tried and tested approaches bringing new strategies, ideas, and capital needed to tackle the country’s most challenging social and environmental problems. From the 1,600 children under the age of 5 who die daily (due to diseases related to poor sanitaon) to the appalling stasc that Indians have greater access to mobile phones than to toilets, targeted and sustainable CSR approaches are required. This is an enormous responsibility and leap of faith. Diverng vast resources away from corporaons and into social projects can lead to ineffecve investments or “dead aid”. Alternavely, the esmated INR 20,000 cr in CSR spending can also lead to progress and prosperity that the country has never seen before. This may be the missing
link enabling over 800 million people to access quality educaon, healthcare and livelihood opportunies necessary for inclusive growth. Read more »