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Government asks companies to allocate 7% of CSR funds to Swachhta Hi Seva

LiveMint logoLiveMint 15-09-2017 Seema Chowdhry

New Delhi: The government has asked companies to devote a portion of their corporate social responsibility (CSR) funds to a cleanliness campaign launched on Friday by President Ram Nath Kovind.

The Swachhta Hi Seva campaign will comprise a range of activities including a nationwide drive to mobilize people to participate in shramdaan (voluntary work) on improving sanitation, construction of toilets and making their surroundings free of open defecation.

According to a government statement, Union minister of state for law, justice and corporate affairs P.P. Chaudhary has sent a note to the heads of more than 1.1 million companies, urging them to devote around 7% of their CSR spending on the Swachh Bharat Kosh (SBK) to the Swachhta Hi Seva campaign, which will run until 2 October. The SBK has been set up specifically to attract CSR funds to the Swachh Bharat Mission (SBM), the government’s flagship cleanliness programme.

“Corporate India spent has spent around Rs250 crore of CSR capital on SBM in FY2016-17. To encourage companies to give more support to SBM, the government, instead of putting a requirement of 7% of contribution to SBM as part of CSR, should enable an ecosystem, encouraging this kind of support by lowering the GST (goods and services tax) rates on sanitaryware and essential products for daily hygiene like soaps, sanitary napkins, etc. which currently fall in the 12-18% GST bracket,” said Richa Bajpai, founder and co-CEO of Goodera, a global CSR management platform.

“To make SBM reach its target of building 12 crore toilets, an investment of Rs2 lakh crore is required, which must largely come from government funds. The thrust on corporate India should be to develop sustainable models for maintenance of toilets and bringing in behavioural change around health and hygiene in the long term. These aspects are integral for the success of SBM too,” she added.

The CSR rules, which came into effect on 1 April 2014, state that companies with a net worth of Rs500 crore or revenue of Rs1,000 crore or net profit of Rs5 crore should spend 2% of their average profit in the last three years on social development-related activities such as sanitation, education, healthcare and poverty alleviation, among others, which are listed in Schedule VII of the rules.

Chaudhary has also asked firms to “direct their employees to go outside their corporate premises and undertake cleanliness drives in identified localities, and sponsor billboards for gram panchayats carrying the swachhta (cleanliness) message”.

“Where a company spends is very context driven,” said Namrata Rana of Futurescape Netcom, a business and technology advisory firm. Rana, who is the co-author of the 2017 Responsible Business Rankings (RBR) along with Utkarsh Majmudar of the Indian Institute of Management Udaipur, said their study found that in 2015-16, 38% of India’s top 200 companies contributed to government health schemes including Swachh Bharat Abhiyaan.

However, Rana believes initiatives such as employee volunteerism can be more helpful than collecting CSR funds. “Volunteering can help in deepening the impact of the Swachh Bharat Abhiyaan because cleanliness and sanitation is an infrastructure issue as well as an issue that involves behaviour change. Employees who work as brand ambassadors can not only impact their own thinking, but also that of their families, localities, offices and schools.”

PTI contributed to this story.

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