Spending 2% on CSR to bridge gap between society, firms: Suresh Prabhu

Union Minister for Commerce & Industry and Civil Aviation Suresh Prabhu at a conference on promoting scientific interventions for transforming India through CSR, in New Delhi, on Tuesday.Photo: PTI

The law under which companies are required to spend two per cent of their profit towards CSR activities provides an "excellent legal framework" to create a bridge between society and corporates, Commerce and Industry Minister Suresh Prabhu today said.

Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards corporate social responsibility (CSR) activities.

He said that India is probably the only country in the world with such a framework.

Corporates that are spending two per cent in CSR activities win goodwill for the industry and "no corporate can ever do good business if it does not enjoy the goodwill of the society," he said here at a function on 'promoting scientific interventions for transforming India through CSR'.

He, however, added that this a challenge for businesses to engage in social development activities.

In 2016-17, as many as 6,286 companies incurred CSR expenditure of Rs 4,719 crore, as per official data.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel