Earmarking CSR Funds for Consumer Welfare Activities
Wednesday, 13th January 2016 at 10:26 am
The Indian Government has called on industry bodies and corporates to allocate some of the funds set aside under corporate social responsibility for consumer welfare activities.
In the country with the world’s second largest population, the Indian Government made the call at a forum to discuss the role and cooperation of the industry bodies in furthering India’s consumer movement.
The Indian Minister of Consumer Affairs, Food and Public Distribution, Ram Vilas Paswan, discussed with the industry the possibility of setting aside part of their compulsory CSR funds to create consumer awareness, especially in rural areas, to protect consumers from misleading advertisements and sale of fake products.
Paswan said that the private sector played an important role in the growth of economy of the country and there should be joint awareness campaign by both government and industry associations which should be funded by the private sector.
CSR in India has moved from a voluntary activity to a compulsory requirement backed by law becoming the first country to mandate a minimum spend on CSR.
The Companies Act 2013 requires companies above a certain financial threshold to spend at least 2 per cent of their average net profits of the preceding three years on CSR.
According to a review by the Institutional Investor Advisory Services (IiAS) the inclusion of the Corporate Social Responsibility law saw a 75 per cent jump in spending on CSR in 2014-15 – the year such spending became mandatory.
The recent forum agreed that the government and industry bodies would work on a six point partnership agenda including jointly developing and implementing an industry standard for grievance redressal and developing a self-regulation code along with the earmarking of CSR funds for consumer welfare activities.