As 'action year' approaches, Indian companies seek compliance with CSR law

By Alys Francis 05 October 2015

An outreach health program run by Trinity Care Foundation as part of the corporate social responsibility initiative of the Hindustan Aeronautics Limited in Bagepalli Taluk, India. The country was the first country to make CSR spending mandatory. Photo by: Trinity Care Foundation / CC BY-NC-ND

When India became the world’s first country to make corporate social responsibility spending mandatory it was expected to trigger a wave of development across the subcontinent.

Results are now rolling in for the first year companies had to spend 2 percent of their average net profit for the past three years on development projects under India’s Companies Act 2013 — so long as they were registered in India and met requirements like having a net worth of 5 billion rupees ($76 million), or turnover of 10 billion rupees.

Early analysis reveals most of the 16,500 odd companies required to spend on CSR fell short of the 2 percent target. Companies aren’t penalized for underspending but have to report why they did.

Authorities have also slashed their estimate for total spending to 90 billion rupees from 150 billion rupees. The government plans to report the final figure at the end of the year.

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About the author

Alys Francis

Alys Francis is a freelance journalist covering development and other news in South Asia for international media outlets. Based in India, she travels widely around the region and has covered major events, including national elections in India and Nepal. She is interested in how technology is aiding development and rapidly altering societies.

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