Planning Commission member Arun Maira today said that making it
mandatory for corporates to spend 2 per cent of their profits on CSR
will not benefit the society if they continue to adopt corrupt practices
that are damaging to the environment.
"The new law where 2 per cent of profits have to be spent on CSR
activities will not benefit the society. What is necessary is that
corporates should consider this as their responsibility towards the
society and not wait for such a law," Maira said at a CII conference on
inclusive development and sustainability here.
He noted the level of people's trust in both public and private
institutions are declining worldwide. Maira also said business
responsibility is not just about CSR but also about understanding its
overall impact on communities as well as the environment.
"During the process of formulation of the 12th Plan, we realised
there is tremendous mistrust in both public and private institutions.
Citizens are neither believing the government nor the corporates. It is,
therefore, the responsibility of the corporate sector to build this
trust among the citizens by conducting their businesses in a way that
will benefit the society at large," Maira said.
Businesses also should work towards creating employment as well as encouraging the manufacturing sector, he said.
"Corporates should not merely concentrate on increasing the GDP numbers,
because in this process, they may adopt certain practices that may be
harmful to the society...Instead, they should ensure sustainability for
all of its stake-holders, including the citizens, by creating employment
as well as encouraging manufacturing that will lead to a healthy GDP
growth," Maira added.
The Planning Commission has also introduced a rating system for states to enable them improve on their business climate.
The rating would be done based on key parameters, including
availability of land, skilled labour and taxation issues. It would be an
annual exercise, which would identify the best performing states so as
to allow others to take a cue from them by possibly adopting their
business practices, he said.
