|THE BENEFITS OF BEING GOOD|
Aruba, August 27, 2015 - On April 1st 2014, the new CSR law came into effect. It stated that every company that has a turnover of over Rs 1,000 crore, net worth of Rs 500 crore or net profit of over Rs 5 crore is required to spend at least 2% of their average net profit of the past 3 years towards corporate social responsibility.
The activities that can be carried out must be one of the activities mentioned in schedule VII of Companies Act 2013. The CSR activities that a company undertakes can be under a registered trust or society established by a subsidiary or associate company. The company must report on the activities carried out along with the utilization of funds while doing so as a monitoring system for the government. If the company does not carry out its activities through a trust or society it must keep an established track record of 3 years proceeding CSR activities. Companies can collaborate with each other or with NGOs to fulfil their CSR requirements but must keep individual records of the project.
It has been more than a year since the CSR law was passed in April 2014 and India has seen a mass movement in CSR activities by corporates. Companies that carried out CSR before the law was passed only needed to organise their system and keep track of their projects. They did not have to worry about spending further profits but rather needed to focus on re-strategizing their current operations to fit into the requirements of the law. For companies that paid very little to no attention on CSR activities had to either scale up their current activities along with introducing a formal body to administrate its operations, or look for new areas in CSR and produce new initiatives.
At present, the main objective of CSR is for companies to gain maximum exposure from stakeholders and society. CSR programs and projects are continuously evolving. Companies form specialized teams that formulate strategies and objectives for CSR activities. Corporates have rapidly begun teaming up with NGOs to apply their prowess, so as to address social problems of a larger scale. CSR has gone through many phases in India, and CSR has helped corporates make a remarkable difference to society and improve quality of lives.
Yet India is a paradox: on one hand it is on its way to becoming one of the largest economies and on the other, it is home to the largest population living in absolute poverty. Companies can be the liberator and help create a balance, using CSR as a superpower to uplift society.