State Moots Authority For Optimal Use of CSR Funds
For optimal management of corporate social responsibility (CSR) funds, the state government is all set to constitute a ‘Rajasthan CSR Authority’. Conceived on the lines of a similar body formed by the Gujarat government, the authority will act as a facilitator for industries to carry out their mandatory CSR activities in the state.
The authority will focus on channelling money for projects that are significant for Rajasthan. To start with, the government will create a corpus of Rs 400-500 crore by encouraging contributions, primarily from micro, small and medium enterprises (MSME).
According to officials, big corporate houses are investing CSR funds in social projects on their own or through designated NGOs. But small industries have a problem as they find it difficult to identify areas or ways of spending the money.
As part of the Companies Act 2013, companies are required to spend 2% of their three-year average annual net profit on CSR activities each financial year. As per estimates, Rajasthan receives about Rs 1,200 crore annually as part of CSR activities.
“The process has started. We will register it in the form of a society. The authority will have a dedicated portal providing details of various projects, implementing agencies and other related information. Firms can pick and choose from this list and our department will facilitate in getting those works executed” said Ajitabh Sharma, secretary, CSR, Rajasthan.
Formalities for constituting the authority and the website have been completed.
The department is expecting to launch it by the end of August. To provide an array of options for industries, state departments have been asked to send a list of projects that have the scope of availing CSR funds. NGOs too will be empanelled for selecting projects.
To bring transparency, each contributor will have access to the status of work online. “We have included a work module system wherein an organization can see the amount spent on a particular work and its current status. They will be encouraged to keep a tab and develop a sense of belonging for the project they have opted for,” added Sharma.
However, it will not be binding on corporates to contribute their CSR funds to the government corpus.
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