Management News

Unequal balance

The business community is an essential ingredient of our democratic society and it has a duty not only to create wealth but also to promote the ethical and social goals of the community. Unless it fulfils both these functions and there by plays its due role as a responsible section, it will not be able to ensure its own survival.” — Ramakrishna Bajaj.
The Companies Act of 2013 has proved to be a landmark in India’s economic history. Social welfare, community development, and inclusive national development have been firmly reasserted as business responsibilities.
Though discussions on the social obligation of business to contribute to the nation’s development have been going on since at least 1965, the Companies Act formalised and streamlined this obligation, putting it at the centre of corporate consciousness. Conceived to bring more responsibility to all spheres of functioning, and especially corporate governance, it has become almost synonymous with businesses giving for social development because of clause 135 which mandates that companies above a certain size spend 2% of the average profits of the last three years on social development projects, or what are now popularly referred to as corporate social responsibility activities.
After a slow start, there has been steady progress in CSR spend. According to the Ministry of Corporate Affairs, against a mandated R2,600 crore, 172 top companies actually spent R3,360 crore in fiscal 2016. A study by KPMG indicates that NIFTY 100 companies spent more than R6500 crore in FY 2016, as compared to R5000 crore in FY 2015. Though figures vary according to the sources, the point to note is that compliance has definitely improved... . . . ... Page 24-25