Mumbai: As the corporate India getting richer, the Corporate Social Responsibility has gone up among the top Indian business class. Over a period of five years, corporate donations have gone up by almost three times to 946 crore. During the same period, profits of these companies have only less than doubled to 1,77,077 crore, reports Apurv Gupta from The Economic Times.
Although a small fraction of their total profits, blue chip companies like Reliance Industries, Hindalco, Grasim, Jindal Steel, Ambuja and Torrent Power have donated more than four times the amount they donated in 2006 while Infosys, Bharti and Jaiprakash Associates have more than doubled their donations over this period.
"It makes sense for Indian corporate to recognize the need for such actions voluntarily, so that the immense growth opportunities that India offers can be realized in a more inclusive manner, where all stakeholders benefit," said Dinesh Thakkar, CMD, Angel Broking.
The number of companies making donations of over 1 crore has steadily gone up to 110 this year from 60 in 2006. However, this still stands at about 0.5 percent of the total profits, much below the much-debated proposal of earmarking 2 percent of the net profit for CSR activities in the new Companies Bill.
Government of India is likely to make it mandatory for big companies to earmark at least 2 percent of the net profits for corporate social responsibility (CSR) activities in the new Companies Bill. If passed, every year corporates will have to spend at least 2 percent of their average net profits during the three immediately preceding financial years on CSR activities. The Bill is expected to be tabled in Parliament in the Winter Session. The new provisions will be applicable to companies having a net worth of 500 crore or more, or a turnover of 1,000 crore or more, or a net profit of 5 crore or more, during a year.