Works under the Corporate Social Responsibility obligation of companies have generated lot of enthusiasm and respect towards the corporate world which was perceived so far as a profit making machine.
The companies have also come forward in social regeneration by undertaking projects like the conservation of tigers in the Sunderbans, West Bengal, training drivers in accident-free driving, popularizing mobile technology in the health, education, agriculture and environment sectors, sponsoring girl children for education, helping physically challenged persons, adopting villages, constructing toilet blocks in schools and a host of other activities.
This latest move has certainly made social and charitable activities of Indian companies in a systematic and professional manner which was earlier based on the whims and fancies of promoters, Directors, the Chairman or Managing Director of a big company or a group of companies. In fact, many temples, schools, hospitals and dharamshalas in the country have come up out of such funds which remained unnamed till the new statutory provision “CSR” was coined by the new Companies Act, 2013 (Section 135). Under the new stipulation, only those companies are covered which have a net worth of Rs 500 crore or more each or turnover of Rs 1,000 crore or more or a net profit of Rs 5 crore or more during a financial year.
Lot of autonomy is provided to companies to undertake CSR activities. It is better if the companies are allowed to take up welfare activities in the vicinity where their manufacturing units are located so that they may win the support of local populace. It is essential to have local support to run a company smoothly. The TISCO company has not seen a strike because it undertook lot of social welfare activities in Tatanagar and in nearby tribal villages. By and large municipal services are run by the TISCO and they have made Tatanagar an ideal city. The Birlas have also set up many of their townships adjoining their plants which have paid them dividends in running plants smoothly with local allegiance. Of course, now this is becoming a costly affair, especially with the dwindling profits of those old units. But the concept still holds good. Secondly, Indian corporates should be allowed to invest in research in line with their products. Indian manufacturing is suffering largely because of inadequate research and development work.
Such contribution can be provided to technology incubators located within academic institutions like IITs and universities and to implement research findings on the field without any delay which is not available in public domain. If the Make in India campaign is to be made successful and vibrant, this initiative is a must. Otherwise indigenous companies will not be able to stand in competition against foreign companies and multinationals (MNCs) and the MNCs and TMNCs will continue to expropriate India’s resources and wealth. As on date, foreign companies are lagging behind in CSR initiatives.
This will also give a push to unattended areas of manufacturing in view of the new developments and innovations. As a result, additional wealth will be generated and the corporate world in India will be able to contribute more for welfare activities for the rural and urban poor.
Therefore, at the initial stage, it will not be advisable to have contributions by companies through notifications for the “Swachh Bharat Kosh” or the “Clean Ganga Fund”. Of course, the companies should be given an option and autonomy to be a partner or a contributor in a Government project or programme. The September, 2015 report by the high-level committee chaired by Anil Baijal on improved monitoring of the implementation of Corporate Social Responsibility policy also recommends autonomy for companies in CSR.
This article was taken from here.