Corporate Social Responsibility in India Ahimsa Round Table 2015 June 23, 2015 Impact India Foundation

History of CSR in India Traditionally socially responsible Concept of parting with a portion of surplus wealth for society’s good can be traced to around 300 BC - Chanakya’s Arthashastra Merchants were considered as assets to society Inactive philanthropy to incorporation of stakeholders’ interest in business model – various methods for social responsibility:

History of CSR in India Stages of evolution: Trusteeship of Wealth Corporate Philanthropy Corporate Citizenship Corporate Social Responsibility (CSR)

Current status of CSR in India Government View: State and non-State actors need to partner together to find and implement innovative solutions for inclusion of the underprivileged in Nation development. Corporate Practice:  Basic objective is to maximize Corporate’s overall impact on Society and Stakeholders.  CSR policies, practices and programmes being comprehensively integrated throughout business operations and processes.  Corporations consider CSR important for protecting goodwill and reputation and enhancing competitiveness.

Companies Act, 2013 Bill passed by the Lower House of Indian Parliament (Lok Sabha) on Bill passed by the Upper House of Indian Parliament (Rajya Sabha) on Received consent of the President of India on for: The Companies Act, 2013 (Act 18 of 2013)

Mandatory spend on CSR Applicability: Every company with income in a financial year of: Net Worth of INR 5 billion (Euros 68.5 mn.) or more OR Turnover of Rs. 10 billion (Euros 137 mn.) or more OR Net Profit of Rs. 50 million (Euros mn.) or more … Requirements: CSR Committee Disclose CSR policy Undertake CSR activities in TEN specified areas Spend at least TWO percent of the average net profits of previous 3 years on CSR Report reasons for not spending and state in Annual Report

Specified CSR Activities under Schedule VII Eradicating extreme hunger and poverty and malnutrition, promoting health care including preventive health care and sanitation and making available safe drinking water; Promotion of education including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects; Promoting gender equality and empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups; Ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water;

Specified CSR Activities under Schedule VII Protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts; Measures for the benefit of armed forces veterans, war widows and their dependents; Training to promote rural sports, nationally recognized sports, para- olympic sports and olympic sports; Contribution to the Prime Minister’s Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women; Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Govt. Rural development projects.

Salient Features India is the first country in the World to mandate CSR spending. Evoked mixed reactions. Additional responsibilities on Companies Good opportunities for NPOs INR 200 billion expected into CSR mainstream Could not see much effect in May take a while to streamline