₹5 crore, the company will be too small to have the wherewithal for CSR programmes. In fact, the rule also says that there has to be a board-level committee to administer the chosen CSR activity and regular reporting of it. This can get onerous and it is not surprising that companies look for easy ways out.
In fact, transferring the money to a centralized fund like the Prime Minister’s National Relief Fund always looks appealing. Otherwise, a lot of management time has to be expended on CSR compliance. The premise here is that companies are not cut out to do social work, which is the responsibility of the government.
While some companies have been doing it for decades, there is usually a personal level of commitment among business leaders who deploy dedicated outfits and staff. The impact of their work is powerful. At times, they even develop townships where such work is carried out and worthy goals, such as empowering women or educating girls, are pursued.
But not all companies have the competence for it. A sample of around 1,200 companies with net profits of above ₹5 crore in each of the last 3 years had an average profit-after-tax of around ₹8.8 trillion, which translates to ₹17,600 crore of CSR spending. This is a large sum that can bring meaningful change.
Two choices exist here. The first is for the government to set up a separate organization to work on the deployment of these resources. If setting up a new organization is too bureaucratic and costly, the Niti Aayog could be entrusted with this responsibility.
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