Be Bold, Take Action Indian CSR and Companies Act 2013

Strategic Philanthropy | Mar, 2014

With the Companies Act, 2013 the Indian government made Corporate Social Responsibility (CSR) activities mandatory for companies that, in any of the three preceding financial years, had: (i) net profits of USD 769,000 or more; or (ii) net worth of USD 76.92 million or more; or (iii) turnover of USD 153.84 million or more. Dasra’s report, Be Bold, Take Action: CSR and the Companies Act 2013, introduces and explains the regulatory provisions and guides corporate investors through basic social investment issues to help shape new CSR strategies. It also provides a roadmap to document and expand the impact of CSR spending.

By making it mandatory for eligible companies to spend at least 2% of their average towards CSR, the Indian government has effectively directed USD 3076.92 million towards the social sector from more than 16,000 corporates. Whether this law transforms philanthropic activity or ends up as a failed legislative attempt to galvanize social investments hinges entirely upon how corporates interpret these CSR obligations. The report focuses on how corporates need to focus on where their CSR investments can maximize social welfare, to share their expertise in harnessing innovation at scale with civil society organizations and government initiatives to create lasting social impact. To do this, corporates need to go beyond the letter of the law and develop CSR organizations, strategies and processes that capitalize on available resources and employ them for the largest impact.

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