The Ministry of Ports, Shipping and Waterways recently announced new guidelines for Corporate Social Responsibility (CSR) activities in ports, specifying the percentage of the net annual profit that ports should allocate to such initiatives. The guidelines aim to promote social and environmental welfare in port areas and empower ports to contribute to community welfare and development.
Allocation Based on Annual Turnover
The guidelines categorize ports based on their annual turnover to determine the percentage of net profit that should be allocated to CSR activities. This approach recognizes that ports of different sizes have varying capacities to contribute to CSR initiatives. Ports with an annual turnover of less than ₹100 crore will be required to spend between 3% and 5% of their net profit on CSR initiatives. This range provides flexibility for smaller ports to allocate a suitable amount for CSR activities while taking into account their financial capabilities.
For ports with an annual turnover between ₹100 crore and ₹500 crore, the CSR allocation will be between 2% and 3% of their net annual profit, with a minimum allocation of ₹3 crore. This provision ensures that ports in this category make a substantial contribution to CSR efforts, considering their larger revenue streams. Lastly, ports with an annual turnover exceeding ₹500 crore will allocate between 0.5% and 2% of their net annual profit to CSR expenditure. This percentage allows larger ports to allocate a reasonable amount for CSR while considering their financial commitments and operational scale.
Minister’s Announcement and ‘Sagar Samajik Sahayyog’ Initiative
The announcement of the new guidelines was made by the Minister of Ports, Shipping and Waterways, Sarbananda Sonowal, during the launch of the ‘Sagar Samajik Sahayyog’ initiative. In his address, Sonowal emphasized the government’s commitment to the principles of ‘minimum government and maximum governance.’ By introducing these guidelines, the government aims to create an enabling environment for ports to actively participate in social welfare and community development activities.
Sonowal highlighted the significance of CSR activities in bringing about positive change in local communities. The guidelines empower ports to undertake projects for community welfare and development, enabling them to play a more active role beyond their core operational functions. The ‘Sagar Samajik Sahayyog’ initiative aligns with the government’s vision of inclusive growth and sustainable development, emphasizing the importance of CSR as a means to achieve these goals.
Implementation Process and Committees
To ensure effective implementation of the guidelines, each major port will establish a dedicated Corporate Social Responsibility Committee. The committee will be led by the Deputy Chairperson of the port, along with two other members. This committee will serve as a central governing body responsible for overseeing the planning, execution, and evaluation of CSR activities within the port.
The Corporate Social Responsibility Committee will play a vital role in coordinating with various stakeholders, including local communities, government agencies, and non-profit organizations. Their objective will be to identify the most pressing social and environmental concerns in the port’s vicinity and develop appropriate CSR initiatives to address them. By involving key stakeholders in the decision-making process, the committee ensures that the CSR activities are aligned with the needs and aspirations of the local communities.
As part of the implementation process, every major port will prepare a comprehensive corporate social responsibility plan annually. This plan will outline the specific projects and initiatives to be undertaken by the port to promote social welfare and address environmental concerns associated with their operations. The plan will act as a roadmap for the port’s CSR activities, providing a clear direction and framework for their implementation.
According to the guidelines, a portion of the CSR budget, equivalent to 20% of the total expense, will be allocated to specific entities and funds. This allocation aims to support initiatives that have a broader impact beyond individual ports. Specifically, 20% of the CSR budget will be directed towards the Sainik Kalyan Board at the district level, the National Maritime Heritage Complex, and the National Youth Development Fund.
The allocation to the Sainik Kalyan Board aims to contribute to the welfare of ex-servicemen and their families, recognizing their significant role in national security. The National Maritime Heritage Complex focuses on preserving and promoting India’s rich maritime heritage, while the National Youth Development Fund aims to empower and uplift the youth of the nation. By allocating a portion of the CSR budget to these entities, the government aims to support initiatives that have a broader national impact and contribute to the well-being of society.
The remaining 78% of the funds will be directed towards various social and environmental welfare activities. These may include projects related to drinking water, education, vocational training, skill development, renewable energy sources, healthcare, livelihood promotion for economically weaker sections, community centers, and hostels. The broad range of focus areas demonstrates the government’s commitment to addressing diverse social issues and promoting sustainable development in port areas.
Monitoring and Evaluation of CSR Projects
Ensuring accountability and monitoring the progress of CSR initiatives is crucial for their effectiveness. To achieve this, the guidelines stipulate that 2% of the total CSR expense should be reserved for monitoring the implementation and impact of CSR projects undertaken by the ports. This allocation will support the establishment of robust monitoring and evaluation mechanisms to track the progress of CSR initiatives and measure their outcomes.
By allocating funds specifically for monitoring, the government emphasizes the importance of transparency and accountability in CSR activities. This provision enables ports to evaluate the effectiveness of their projects, identify areas for improvement, and make necessary adjustments to ensure the desired impact on the target beneficiaries.
The Ministry of Ports, Shipping and Waterways’ new guidelines for CSR activities in ports are a significant step towards promoting social and environmental welfare. By addressing diverse social and environmental concerns, the ports can play a transformative role in their surrounding communities, supporting the government’s vision of holistic development and maximizing the welfare impact of port operations. Through effective implementation and continuous monitoring, the guidelines will help ensure that CSR activities in ports lead to sustainable development, improved livelihoods, and a better future for all stakeholders involved.