Chennai: The government has expanded the scope of corporate social responsibility spending, allowing companies to spend on incubators and public-funded universities.
As per an existing legislation, large companies have to mandatorily spend two per cent of their profits every year on corporate social responsibility (CSR). The government had earlier recommended a few areas, including eradication of hunger and poverty, maternal and child health, HIV, TB and malaria, promotion of gender equality and environmental sustainability, which needed CSR spending.
On Friday, Finance Minister Nirmala Sitharaman said that the government has decided to expand the scope of CSR two per cent spending to promote education and entrepreneurship.
“Now CSR two per cent fund can also be spent on incubators funded by Central or State Government or any agency or Public Sector Undertaking of Central or State Government, and making contributions to public funded Universities, IITs, National Laboratories and Autonomous Bodies (established under the auspices of ICAR, ICMR, CSIR, DAE, DRDO, DST, Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals,’ she said.
“This is a true game changer and a turning point for funding for incubators. It recognizes the fact that Innovation is critical for India with the incubators playing an important role and it needs support from the CSR spend bucket,” said Ninad Karpe, Partner at 100X.VC.
According to Mohammad Azhar, Program Leader, INVENT at Villgro, it is a welcoming step to go from ‘good to great’.
“As an incubator, we have also noticed a significant growth in the creation of rural jobs by social enterprises, especially those which are well incubated and funded. This move will certainly help social tech-based enterprises to get more equity-free funding and deep handholding from incubators for their sustainability. Essentially because affordable product and services in sectors such as healthcare, agri-tech and ed-tech are vital to address the major problems in the rural belt of India and will act as a catalyst for their holistic growth and economic empowerment,” he said.
