Gujarat govt to help firms use CSR funds

Darshan Desai  Ahmedabad, June 13, 2015 | UPDATED 06:40 IST

Gujarat CM Anandiben Patel

The Gujarat government has been hardselling the state as an ideal industrial investment destination while simultaneously drawing allegations that the same is at the expense of human development index. It is now out to prove it can go beyond.

The government has now set up the Gujarat Corporate Social Responsibility (CSR) Authority, the only one from a state government in the country, to create an exclusive agency to channelise contributions to finance projects like construction of toilets and tackling malnutrition, besides several other themes.

"It is Chief Minister Anandiben Patel's idea, which has been spruced up by the official machinery," Maheshwar Sahu, who is a retired IAS officer and the chairman of the CSR Authority created in April, told Mail Today

"We have created this authority to facilitate companies to channelise their mandatory two per cent earnings for social infrastructure." He says there are 14,000 companies, including some 13,500 forming the small and medium scale industrial units, which are supposed to park funds under CSR activities.

Sahu says the idea is to create a channelising body where the companies investing in CSR can donate or park their funds for effective social development initiatives of the state government. "Several companies don't know where to put their mandatory CSR funds, so our idea is to help them," Sahu said.

"So, once a company approaches us seeking guidance on where to invest, we will put it through an implementing agency at the grassroot level working on the particular subject. The companies can also directly contact the agencies, which will largely be non-government organisations (NGOs)," he says.

Sahu says that as per estimates for 2014-15, the corporates registered in Gujarat are expected to release around Rs. 700 crore to Rs. 800 crore in mandatory CSR funds by July.

"We have taken up pilot projects for construction of toilets in rural and urban areas, tackling malnutrition and diagnostic healthcare," Sahu added. He said the initiative was not to put state government funds but those of the corporates into social initiatives.

Sahu played a pivotal role in the Vibrant Gujarat Global Investment Summits initiated by Prime Minister Narendra Modi.

"We have started registering companies across the state to collect donations. This will also help companies fulfil their mandatory responsibilities as well as help in achieving the government's target of creating better social infrastructure. All the state public-sector units (PSUs) are also participating in their CSR funding," Sahu said.

Going by the Companies (Corporate Social Responsibility Policy) Rules, 2014, every company, private limited or public limited, which either has a net worth of Rs. 500 crore or a turnover of Rs. 1,000 crore or a net profit of Rs. 5 crore, needs to spend at least two per cent of its average net profit for the immediately preceding three financial accounting years, on corporate social responsibility activities.

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