Indian companies will spend close to Rs 14,000 crore on corporate social responsibility activity (CSR) in FY 15 and the amount will increase in the years ahead, finance minister Arun Jaitley said on Tuesday. Under the new Companies Act, companies with a net worth of more than Rs 500 crore or revenue of over Rs 1,000 crore or a net profit of more than Rs 5 crore need to spend at least 2% of the average net profit of the preceding three years on CSR activities.
"... CSR alone in its very first year is going to contribute about Rs 14,000 crore into the (social) sector and that's reasonably a large amount of money. This is going to increase year after year as corporate profits increase," he said while speaking at a function organised jointly by the Jubilant Bhartia and Schwab foundations. Jaitley also holds the charge of corporate affairs ministry that is responsible for CSR law.
The UPA government had prescribed certain activities eligible for such spending. The new government has added contributions to Swachh Bharat Fund and Clean Ganga Fund as eligible spend under this law.
However, Jaitley said corporates have been a late entrant to the idea of charitable causes. "The best in the Indian society is yet to be realised...They (corporates) are essentially obsessed with their cause, they are convinced about their cause," he added.
Source: Economic Times
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