Finance Minister Nirmala Sitharaman said that the Government has decided to expand the scope of Corporate Social Responsibility (CSR) 2% spending to promote education & entrepreneurship.
As per an existing legislation, large companies have to spend 2% per cent of their profits every year on Corporate Social Responsibility (CSR). The government had earlier recommended a few areas, including eradication of hunger & poverty, maternal and child health, HIV, TB and malaria, promotion of gender equality and environmental sustainability, which required CSR spending. The Government of India has expanded the scope of corporate social responsibility spending, allowing companies to spend on incubators and public-funded universities.
Corporate Social Responsibility 2% 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.
Ninad Karpe, Partner at 100X.VC said, this is a real 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.
Mohammad Azhar, Program Leader, INVENT at Villgro said as an incubator, 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 hand holding from incubators for their sustainability. Affordable product & services in sectors such as healthcare, agri-tech and edu-tech are vital to address the major problems in the rural belt of India and will act as a catalyst for their economic empowerment & growth.