Fighting debt: Maharashtra eyes CSR funds to kick-start new projects
With mounting debt affecting its ability to spend on development projects, the Maharashtra government is now looking at the corporate sector to get some of these projects off the ground.mumbai Updated: Aug 22, 2015 23:08 IST
With mounting debt affecting its ability to spend on development projects, the Maharashtra government is now looking at the corporate sector to get some of these projects off the ground.
The state government will introduce a multi-tiered system in order to tempt corporates to spend their corporate social responsibility or CSR funds on crucial development projects.
Under this system, the state is hoping to gain corporate help on three aspects — its pet projects and schemes, specific city-level infrastructure projects across the state, as well as on entire sectors.
As HT had reported earlier, the government has also been planning a new CSR authority, a body that will help channelise these funds.
On Monday, chief minister Devendra Fadnavis will kick-start this new system by meeting corporate honchos of more than 150 big-ticket industries, confederations, as well as representatives of public sector undertakings.
The Companies Act, 2013, mandates that corporates with more than Rs5 crore net profit must use at least 2% of it over three years, for a list of activities permitted under CSR rules.
Wanting to tap into the cash-reserves generated by these rules, the state has now planned a systematic interface for the corporate world.
The idea, officials said, is simple.
“Corporates are mostly clueless about the options before them while making donations under CSR. With this new mechanism, we will identify key areas where they can invest and ensure tangible benefits from the funds they pour in,” said an official from the chief minister’s office (CMO), which has been trying to put together the mechanism.
Under this approach, the state government has planned three possible levels at which corporates could participate in development.
The first is for projects that the CMO has identified — mostly pet projects of the state and Central governments, which corporates will be encouraged to take part in.
These includes schemes such as Digital India, Swachh Maharashtra, Beti Bachao Beti Padhao and Jalyukta Shivar, among others.
The second option for corporates is stand-alone infrastructure projects.
For this, the state is encouraging municipal corporations and councils to establish CSR cells for smoother interactions with the corporate world.
The third option for companies is taking up work across development sectors they are interested in, at the department level.
“For instance, some want to work on the educational sector. Hence, we will facilitate their entry into the sector they chose. The department will swing into action and design schemes, projects that could be implemented,” said the official from the CMO.
First Published: Aug 22, 2015 22:38 IST