Bengaluru: Taking a cue from the Union budget 2016-17, companies are likely to spend their corporate social responsibility (CSR) funds on higher education, skill development and job creation in the next financial year.
Finance minister Arun Jaitley, in his budget speech, mentioned nine focus areas of development, including education, skills and job creation.
To promote higher education, Jaitley said the government will set up a Higher Education Financing Agency (HEFA) with an initial capital base of ₹ 1,000 crore.
HEFA will be a not-for-profit organization that will leverage funds from the market and supplement them with donations and CSR funds, Jaitley said.
“These funds will be used to finance improvement in infrastructure in our top institutions and will be serviced through internal accruals," he said.
For skill training, the budget earmarked ₹ 1,700 crore, which will be used to set up 1,500 multi-skill training institutes across the country.
Jaitley also proposed to further scale up the Pradhan Mantri Kaushal Vikas Yojna to impart skill training to 10 million young people over the next three years, from the current 2.4 million.
In 2014-15 too, education and skill development were the key areas that attracted large CSR spending. A total of ₹ 6,338 crore was spent on CSR by 460 companies in FY15, and education and skill development attracted 23% of the CSR spending, according data from the ministry of corporate affairs (MCA).
Experts are unhappy with the idea of government setting the agenda for CSR spending.
“It’s a discouraging trend that year after year the government creates new initiatives and expects CSR funds to flow into these initiatives, be it Swachh Bharat Kosh or Clean Ganga, the PMRF (the Prime Minister’s Relief Fund) or now HEFA," says Noshir Dadrawala, chief executive of the Mumbai-based Centre for Advancement of Philanthropy.
“The whole purpose of CSR is defeated if the government lays the agenda on what the priority areas for companies should be. And moreover, it makes the accountability for CSR move from the company to the government" added Dadrawala.
Swachh Bharat continues to be the focus of the government as Jaitley set aside ₹ 9,000 crore for the cleanliness and sanitation drive in the budget.
“The concept of Swachh Bharat was very close to the heart of Father of the Nation Mahatma Gandhi. Keeping this in mind, the government has decided to allocate ₹ 9,000 crore for the Swachh Bharat Abhiyan," Jaitley said in his budget speech.
After the Swachh Bharat Abhiyaan was launched on 2 October 2014, in 2015, Jaitley set up a Swachh Bharat Kosh (fund) to attract contributions from corporate entities. During the year, it garnered ₹ 42.6 crore from companies, according to MCA.