MANDATORY CSR SPENDING- A NEW SOURCE FOR TRANSFORMING RURAL INDIA

The emerging concept of Corporate Social Responsibility (CSR) goes beyond charity and requires the companies to act beyond its legal obligations and to integrate social, environmental and ethical concerns into company's business process. The concept of CSR demands businesses to operate transparently and responsibly with the considerations of its stakeholders and the community at the forefront, beyond what is legally required to them. India is the first country in the world making CSR mandatory by law. Govt. and Regulators have responded to the National Voluntary Guidelines for Social, Environmental and Economic Responsibilities of business. Supporting to this the CSR clause within the companies Act 2013 is introduced. According to Indian Institute of Corporate Affairs (IICA) more than 6000 Indian companies will be required to undertake the CSR projects in order to comply with the provisions in the Act. Further some estimates also indicate that CSR commitments from companies in India can amount to more than 20,000 Crore INR, following at least 15-20% growth every year as per growth of business sector. If only 50% amount of this huge spending by corporates is diverted to rural India, no doubt in coming ten years the face of Rural India will be defiantly changed. Considering CSR activities listed in schedule VII of the new Companies Act 2013, a big part of CSR spending will now automatically be diverted to rural areas, which will be useful not only for upgrading overall rural infrastructure but also for improving the living standard of rural peoples.