New Delhi, Dec 4 (IBNS) The Associated Chambers of Commerce and Industry of India (ASSOCHAM) has welcomed the provisions of spending of at least 2 per cent of net profit on corporate social responsibility (CSR) activities in the Companies Bill, mandatory for some of the select corporates, both in the private as well public sectors.
ASSOCHAM has expressed satisfaction that the benefits under Corporate Sustainability Responsibility (CSR) will be made available to larger number of beneficiaries at the lower rungs of the Pyramid on a Sustainable basis under the proposed dispensation.
In a communication, addressed to the Corporate Affairs Minister, ASSOCHAM President R N Dhoot stressed that any corporate role in contributing towards inclusive growth needs to be planned properly in order to achieve sustainable outcomes.
It is well established that inclusive growth approach takes a longer term perspective as the focus is on productive employment rather than on direct income redistribution, as a means of increasing incomes for excluded group, he said. Therefore the availability of such funds needs to be sustainable and capable of providing employment on a longer term.
The Chamber has emphasized the need to provide both clarity and flexibility to companies plan and design their initiatives for CSR. Suitable rules may be made in this direction under the proposed companies bill.
ASSOCHAM said it also strongly advocates for establishment of a National Body/nodal authority simultaneously to monitor, work out the modalities with eligible activities, ensure best practices, oversee end use of funds, provide geographical reach, full use of the funds and provide a structure to measure such activities.
However, ASSOCHAM further suggested that such institutional structure is independent and out of government control but accountable.
Meanwhile, Dhoot suggested that funds allotted for CSR remain unspent in several PSUs which may be due to lack of planning, non availability of workable and effective models or could be procedural snags.
Such gaps need to be plugged thereby to demonstrate that proposed structure be made robust and accountable, he said.