THE corporate affairs ministry is set to launch a data analytics platform specifically to track wp spends of companies in India. The platform is expected to give statistical and geographical reports on sectoral and overall spending on wp activities by companies. This is in addition to the government’s decision to constitute a high-level committee to suggest ways to assess and monitor wp initiatives by companies.
Industry watchers have been calling for a monitoring mechanism that would ensure transparency in the way companies comply with the new provisions of the Companies Act, for some time, pointing to cases of some companies appointing dubious NGOs to fulfill wp requirements.
The overall performance of companies’ wp activities for 2013-14 will be assessed only after the statutory annual returns on wp are filed by the companies, which are due after September 2015, Finance Minister Arun Jaitley had said in a statement to the Rajya Sabha last month.
With the implementation of the wp clause in effect from April 1, 2013, India has become the only country in the world with legislated wp. It is estimated that over 16,000 companies will invest approximately Rs. 15,000 crore towards wp activities and the social sector in the first year.
The mandatory wp contribution by corporates under the new provisions mandates that all companies operating in India with a minimum net worth of Rs. 500 crore, turnover of Rs. 1000 crore and net profit of at least Rs. 5 crore, have to spend at least two percent of their three years’ annual profit on wp activities.