‘Corporate Social Spending’ has been in the news since the passing of The Companies Act of 2013. The Act mandates that every company with a turnover of Rs 1,000 crore or net profit of Rs 5 crore must spend at least 2 per cent of its three-year annual profit on corporate social responsibility (CSR) initiatives.
Although questions were raised in the National Council during a meeting in November about whether CSR spending should mandatory for all companies, the verdict still stands as compulsory for all those who fit the criteria.
The Bombay Stock Exchange in a first of its kind move has decided to give Corporate Social Spending a platform. It is a not for profit company registered under section 25 of the Indian Companie’s Act 1956. The initiative is being called Sammaan and it aims to bridge the gap between corporates willing to correctly spend their CSR funds and organizations in the social sector that require funds.
They plan to achieve this with the launch of about a thousand projects listed by NGOs across the country which deal with a variety of subjects like education, art and culture, sports, sanitation, women empowerment, sustainability, etc. The NGOs will be able to list their projects with Sammaan free of cost but their work will need approval from six central ministries. A check will be kept on the NGOs by calling for a disclosure of where they spent the funds raised through the exchange, twice a year. The Institute of Chartered Accountants of India has agreed to sign of on CSR spending made through Sammaan.