Gujarat-based companies choose health and education when it comes to corporate social responsibility (CSR) programmes. These two sectors account for around 90% of the amount spent on CSR.
In fiscal 2014-15, health and education topped the list of several Gujarati companies such as Adani Port and SEZ Ltd (APSEZ), Cadila Healthcare, Torrent Power, Cera Sanitaryware Ltd and Atul Ltd.
“Following their global peers, all Indian companies, not just Gujarat-based companies, mainly take up CSR activities in health, education, infrastructure and livelihood,” said Sunil Parekh, advisor to Zydus Cadila Group.
Of the total Rs 761 crore for CSR in 2014-15, Reliance Industries Ltd (RIL) spent Rs 608 crore on healthcare, the company said in its annual report for 2014-15.
As per the Companies Act, 2013 all companies are required to spend at least 2% of the average net profits on CSR — fiscal 2014-15 was the first year of implementation.
“Funding Incubators and start-ups are also allowed in CSR but companies choose to spend on needy people,” added Parekh. Woman empowerment and sustainable livelihood are other prominent sectors which companies focus when it comes to corporate social responsibility programmes.
“Skill development, environment sustainability, rural infrastructure and renewable energy are other sectors that corporate companies should focus with regard to their CSR activities,” said Namita Vikas, senior president and country head, responsible banking, Yes Bank. Vikas was also involved in the consultation process of drafting the new CSR rules.
Industry experts, however, are divided over making CSR mandatory. Some believe that regulation (with regard to CSR) is not a good for corporate firms and it is better to keep it voluntary.
Others are of the view that mandatory CSR is something which should have been done long before. “Two per cent of net profit is a small amount and it is not going to make a hole in the balance sheets of the companies,” said a top company executive during a debate over CSR in Ahmedabad.
This article was taken from here.