Private and government organisations which were, over a period, carrying out community development and welfare activities, will now be covered under the Corporate Social Responsibility (CSR) programme having most of the earlier areas of activities.
CSR is the new domain of a world of opportunities for youth. With about a whopping Rs 20,000 crore to be spent by private and public sector companies, the need for CSR professionals is already being felt.
While the NGOs are doing most of the activities on behalf of various organisations and
institutions, the CSR funds still need more people who will oversee the right project from the approval stage to utilisation of funds, timely implementation and, above all, sustainability over a long period.
The Government of India has now made CSR mandatory for all companies – both private and government under the Companies’ Act, 2013. Nearly 8,000 companies come under the ambit of this Act. With the enhancement of Section 135 of the Act which relates to CSR, India has, perhaps, become the first country in the world to bring CSR provisions within the statute.
It is estimated that over 60,000 CSR professionals will be required in the coming years. The Ministry of Corporate Affairs has notified Section 135 and Schedule VII of the Companies Act 2013 as well as the provisions of the Companies (Corporate Social Responsibility Policy) Rules, 2014 and they came into effect from April 1, 2014.
Accordingly, every company, private limited or public limited, which either has a net worth of Rs 500 crore or a turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more, needs to spend at least 2% of its average net profit for the immediately preceding three financial years on CSR activities every financial year.
These activities should not be undertaken in the normal course of business and must be with respect to any of the activities mentioned in Schedule VII of the 2013 Act. Only activities in India would be considered for computing CSR expenditure.
The activities that can be undertaken by a company to fulfill its CSR obligations include eradicating hunger, poverty and malnutrition, promoting preventive healthcare and sanitation, safe drinking water, promoting education, educational skills and livelihood enhancement, promoting gender equality, empowering women, setting up homes and hostels for women, orphans and day care centres for senior citizens etc.
Reduce inequalities
They also include measures for reducing inequalities faced by socially and economically backward groups, ensuring environmental sustainability and ecological balance, animal welfare, protection of national heritage and art and culture, promotion of traditional arts and handicrafts, measures for the benefit of armed forces veterans, war widows and their dependents, training to promote rural, nationally recognised paralympic or Olympic sports etc.
It can also include contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central government for socio economic development and relief and welfare of SC, ST, OBCs, minorities and women, contributions or funds provided to technology incubators located within academic institutions approved by the Central government, rural and slum development projects.
However, in determining the CSR activities to be undertaken, preference will need to be given to local areas and the areas around where the company operates. A company can undertake its CSR activities through a registered trust or society, a company established by its holding, subsidiary or associate company or otherwise, provided the company has specified the activities to be undertaken, the modalities for utilisation of funds as well as the reporting and monitoring mechanism.
If the entity through which the CSR activities are being undertaken is not established by the company or its holding, subsidiary or associate company, such entity would need to have an established track record of three years undertaking similar activities. Companies can also collaborate with each other for jointly undertaking CSR activities, provided each of the companies are able to individually report on such projects.
While many educational ins-titutions and universities have begun to include CSR in their regular curriculum at the graduate as well as post graduate levels as one of the subjects, some of them are even offering comprehensive Bachelor and Master degrees in CSR.
The openings for CSR personnel is wide and opportunities are growing every year right from NGOs, private institutions, industry, state, Central and PSUs. Indeed, a promising future for CSR is here to stay.
