Ministers urge India Inc to help NGOs transform social sector

NEW DELHI: Key policymakers have urged corporates in the country to work with committed social organisations to help transform the country’s social sector and not restrict themselves to mandatory CSR spending.

“In country like India, the role of businesses is not just profit making or creating job,” minister of state for finance Jayant Sinha said on Monday. “Their true potential could be met only if they became as a force for good in society,” he said at the launch of the Economic Times CSR Compendium.

“Workforce of companies should become valuable resources for assisting NGOs and government,” he said.

Speaking on the occasion, railway minister Suresh Prabhu said that if the management of India Inc and commitment of social activists were pooled together, it could truly transform the social sector of the country. “Companies need to use their resources more efficiently for the larger good of society. There’s a need to combine money and management to make the real change,” he said.

The Economic Times CSR Compendium is an initiative of Times CSR, a vertical of the Times Group.

Its launch marks the completion of one year of the corporate social responsibility (CSR) regime in India, which was introduced through the Companies Act, 2013. Under the CSR norms, companies with net worth of more than Rs 500 crore or revenues of over Rs 1,000 crore or a net profit of more than Rs 5 crore need to spend 2% of their three-year average annual net profit on CSR activities in each financial year, starting from 2014-15.

Sectors that come under the ambit of CSR include rural development, education, contribution to the Prime Minister’s relief fund, Swatch Bharat fund, Clean Ganga fund, promotion of sports, art and culture, and providing basic healthcare. The two ministers said companies should do more than that to help the country overcome its social challenges.

“The corporates have to push the envelope for social responsibility,” Sinha said. “Businesses must create shared value in the society. Companies like Tata have done it in Jamshedpur.” He said companies putting in world class environmental standards also count as social responsibility.

The minister said India lacks trained manpower in the field of urban development, education and healthcare and it should be the responsibility of Indian corporates to provide the assistance of their highly trained manpower for uplifting these sectors.

“In US there is service corps or volunteers who assist these institutions. We could have the same in India. There’s a need to bring managerial quality of corporate sector to social sector,” Sinha said.

As per the Companies Act, companies have to set up a separate governance framework for CSR including a CSR committee. The government has set up a six-member high level panel to suggest steps for improved monitoring of social welfare activities done by them under the Companies Act. The panel is expected to submit its report next month.