The nation continues to show appreciation for the dedicated service and patriotic sacrifices of India's Armed Forces men, women and their families during wars. However, much more is desirable on this front particularly for the AFVs, WWs and their dependents. Fortunately Ministry of Corporate Affairs vide its Notification dated 27th February, 2014 has come up with the modified Schedule VII which includes activities involving measures for the benefit of AFVs, WWs and their dependents, which can be undertaken by the Companies as a part of their CSR initiatives.

The welfare initiatives which were so far restricted to the company's workforce and their families are now opened up to other sections of society as well. Funding under the provision of the Companies Act of 2013 mandates collaborative developmental strategy where the responsibility of public welfare is shared between the state and eligible private actors. A key intent behind making CSR spending mandatory was to generate social capital for companies. CSR is governed by clause 135 of the Companies Act, 2013.The CSR provisions within the Act is applicable to companies with an annual turnover of 1,000 crore INR and more, or a net worth of 500 crore INR and more, or a net profit of five crore INR and more.

The Act encourages companies to spend at least 2% of their average net profit in the previous three years on CSR activities. Spending channels being deployed are;direct by the Companies ,through company foundations and through implementing agencies. Spending the entire budget of 2% of the average net profit of past three financial years is proving to be a challenge for companies due to lack of being able to identify the right opportunity or project and not being able to find an implementing agency.

It is estimated that over 6,000 companies will be required to undertake CSR projects, with many companies undertaking these initiatives for the first time. This will include small- to medium-scale companies which may not have proper set up for undertaking the same. There is a tendency to rely on tried and tested approaches in traditional development areas, instead of being creative and innovative.  CSR budgets are being viewed as sources of finance to fund activities that should ideally have been done using public finances. Interference from powers that be is robbing deserving beneficiaries of the opportunity to improve part of their life.

Till now health & sanitation, education & skill development, and rural development are the top three developmental areas for CSR spends. The absolute amount of money contributed to PM’s Relief Fund has reduced by 25%. Empowering women/ support for senior citizens/ AFVs, WWs and their dependants saw very few takers. CSR on AFVs, WWs and their dependents has been less than one crore rupees by each company, which have shown interest.

Companies with no past experience of CSR see it as a jigsaw puzzle, particularly when it comes to activities involving measures for the benefit of AFVs, WWs and their dependants. Our Team, mostly who are AFVs understand the AFVs’ perspective and life of WWs will suggest and assist in drawing up more effectively sustainable schemes for activities involving measures for the benefit of AFVs, WWs and their dependants, both in house / Corporate Foundations, directed at something concrete and constructive, the true spirit of CSR. The services we offer include CSR strategy/ prospective plan, feasibility study, monitoring and evaluation, baseline study, impact assessment study, monitoring, training and sustainability reporting.

After all, CSR is about changing peoples’ lives, for good. Why leave out the AFVs, WWs and their dependents! Email us or give us a call today with your questions.