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Updated: January 24, 2013 11:15 IST

Constructive social responsibility

Sandeep Joshi
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Plugging the loopholes: Minister Sachin Pilot.
Plugging the loopholes: Minister Sachin Pilot.

The Corporate Affairs Ministry decides to put a strict provision in the proposed Companies Bill to stop religious donations in the garb of CSR

Many eyebrows were raised last month when business tycoon Vijay Mallya donated a 2.5 kg gold-plated door worth Rs. 80 lakh to Lord Subrahmanya temple at Kukke in Karnataka’s Udupi district. The Twitter platform was abuzz with messages questioning the logic behind it and suggesting Mr. Mallya to concentrate on reviving his crisis-hit airline business and pay timely salaries to his employees instead of wasting money.

Mr. Mallya’s offering to the temple might be from his own pocket, but there are businessmen who give donations to temples, religious trusts, ashrams and religious preachers in the garb of corporate social responsibility (CSR).

But now the Ministry of Corporate Affairs has decided to plug such loopholes by putting in strong provisions in the proposed Companies Bill.

“Since Sachin Pilot took over as the Corporate Affairs Minister, his focus has been to ensure that the corporates do not take advantage of a weak law to divert funds from their CSR kitty to religious organisations or donate it to self-styled godmen. A potent Companies Bill is being prepared to see that the CSR funds are invested in a way that it contributes to growth and quality of life of common people,” said a senior government official.

Pointing out that there has been a growing trend where corporate and business community, particularly medium and small companies, divert a portion of their income towards donations for religious purposes to save on tax, the official said the CSR fund is meant for public good and not to please any godman, a sect or religious organisations. “This needs to be checked immediately,” he noted.

When contacted, Mr. Pilot said his effort has been to ensure that the CSR activities that companies undertake should have bigger goal in mind — to serve underprivileged people and work for the society as a whole through constructive projects and ideas. “The government-owned firms have already taken lead by spending 0.5 to 5 per cent of their profit on CSR activities as per plans approved by their Board…We want private sector to follow the same model in a transparent manner,” Mr. Pilot said.

He asserted that the private sector should systematically plan and execute their CSR initiatives to build synergies and achieve results that are visible within a short timeframe. “We want the corporates to decide their areas of activities and strategies for execution to fulfil their CSR goals...They could focus on education, hygiene and sanitation in rural areas, particularly for provision of toilets in girls’ schools, besides contributing towards water and energy conservation technologies. The scope is immense and the companies need to think differently. Through constructive CSR, we can change the nation.”

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