31 October, 2020

CSR Has Not Translated Into Real Benefit For The Poor

The 2 per cent CSR rule has brought more firms into the social sector, but much of it is still just box-ticking

Tata Steel hosts Samvaad as a CSR activity for tribals
CSR Has Not Translated Into Real Benefit For The Poor

After over four years of corporate social responsibility (CSR) becoming mandatory in India, there remains considerable gap between what had been the objective of this pol­icy and what has been the outcome so far. The estimates of funds this regulation was expected to generate for the benefit of stakeholders—people affected or displaced when an enterprise was set up or expanded operations—have fallen from around Rs 40,000 crore to about Rs 14,000 crore, but nobody knows why the expected money is not coming in.

As per the Companies Act, 2013, a company with a net worth of Rs 500 crore or more, or a turnover of Rs 1,000 crore or more, or a net profit of Rs 5 crore or more in a fiscal year is required to spend 2 per cent of its average net profit in the preceding three years tow­ards CSR. Various studies, including some by the government, mostly focus on the quantum of funds spent by corporates—in some cases, including information on how much is spent on various sectors like healthcare, education, skill development, environment protection, water and...



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