Corporate Social Responsibility Not to be Treated as Peripheral Activity: Union Minister
Corporate Social Responsibility (CSR) works should be part of the long term strategy of companies and should not be treated as ad hoc activities, Union minister P P Chaudhary said on Tuesday.
The Minister of State for Corporate Affairs also emphasised the CSR activities help in bridging the gap between rural and urban areas. Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities.
“The principle behind the CSR legislation was that it should not be treated as a peripheral or ad hoc activity… CSR now forms part of the overall long term strategy and finds a place on boardroom agendas and annual reports,” Chaudhary said.
Speaking at the National CSR Summit organised by industry body CII here, he said that companies spend around Rs 4,330 crore on healthcare, eradicating poverty, hunger and malnutrition as part of CSR in 2015-16. Around Rs 4,690 crore was spent in the area of education and livelihood and Rs 1,327 crore on spent on rural development, he added.
“Although the concept of CSR is prevalent in other countries, you will appreciate that India is the first country to mandate the corporates to spend some parts of their profits for the welfare of the society,” Chaudhary said. Noting that CSR activities help bridge the gap between rural and urban areas, the minister said such works can be made more impactful through innovation.