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India Inc likely to spend Rs 22,000 cr on social sector

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INDIA INC. will be investing around Rs 22,000 crore towards corporate social responsibility (wp) activities once the provisions of the recently amended Companies Act making it mandatory for such allocations get implemented, according to consultancy firm Ernst & Young.  “Given the mandate it is estimated that nearly 16,500 companies will invest Rs 22,000 crore towards wp,” said Vijay Ganapathy from EY India’s advisory services, speaking at a seminar on CSR in Mumbai.

A statement from the All-India Association of Industries (AIAI), the organisers of the seminar, quoted Ganapathy as saying such a move will be extremely beneficial for the economy as it will help ensure inclusive growth.

As per the provisions of the new Companies Act, any company having a turnover of more than Rs 1,000 crore, or a net worth of over Rs 500 crore, or a net profit of over Rs 5 crore, has to spend 2 per cent of their annual net profit on wp activities. A statement from the All-India Association of Industries (AIAI) quoted Ganapathy as saying such a move will help ensure inclusive growth.

Ever since the new policy was drafted to make such spending mandatory for for-profit companies, corporates have had mixed reactions to the new provisions. The new wp policy – part of the new Companies Act of 2013 which replaced the old Companies Act of 1956 – has been applicable from April 1, 2014.

(Agencies)