Mandatory CSR spending the right push for meeting welfare goals: Tarun Bajaj
PremiumCSR spending of companies has grown significantly from ₹10,066 in FY15, the first year of implementation of CSR under legislation to ₹24,865 crore in FY21
New Delhi: The mandatory 2% corporate social responsibility (CSR) spending by companies is certainly a right push for the nation towards achieving sustainable development goals (SDGs) and public private partnerships in transforming India, said revenue secretary Tarun Bajaj, who also holds the charge of secretary in the ministry of corporate affairs.
Bajaj said in the monthly newsletter from the ministry that India has the most elaborate CSR mechanism and the country has started a journey towards setting a benchmark in attaining sustainability goals and stakeholder activism in nation-building.
Bajaj said that the new reporting framework for CSR marks a revolutionary change. In February this year, the ministry released the Companies (Accounts) amendment rules, introducing a new form CSR-2 which is required to be filed by those entities which fall under provisions of section 135 of the Companies Act which are required to comply with the provisions of CSR.
“The introduction of CSR-2 marks a revolutionary change and it is very important from a company’s end to comply with the said amendment with utmost attention and diligence," Bajaj said in the newsletter.
Bajaj pointed out that CSR spending of companies has grown significantly from ₹10,066 in FY15, the first year of implementation of CSR under legislation to ₹24,865 crore in FY21. Health and sanitation saw maximum funding of around 35% of the total in FY21, followed by education, differently-abled and livelihood sector accounting for around 32% in FY21. This is followed by rural development at around 7.3%. The largest recipient of CSR funds are Maharashtra, Gujarat and Karnataka.
As per law, companies with a net worth of ₹500 crore or more, or turnover of ₹1,000 crore or more or net profit of ₹5 crore or more during the preceding financial year are required to invest 2% of their average net profits for three preceding years on CSR.
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