NEW DELHI: The government still struggles to provide reliable basic services to a majority of its citizens, trapping hundreds of millions of them in poverty. Now the country’s richest firms have been told they must help.
Under the new amended Companies Act passed last month by parliament, large businesses have been asked to spend 2 percent of their profits each year on “Corporate Social Responsibility” (CSR).
“The idea is that if we could divert some corporate energy and the corporate way of doing business into our development sector, for a country like India it could help enormously,” the head of the Indian Institute of Corporate Affairs (IICA), Bhaskar Chatterjee, explained to AFP. CSR is broadly — some say vaguely — defined in the law to mean funding programmes for education, poverty alleviation, protecting the environment or tackling disease, among others.
It’s one of the first such laws of its kind in the world.