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Indian pharma majors likely to spend INR 325 cr under CSR scheme

Jan 16, 2013

With the passing of the Companies Bill, the pharmaceutical industry will have to shell out around INR 300 crore under the Corporate Social Responsibility Scheme.

With the passing of the Companies Bill 2012 in the Lok Sabha on December 18, 2012, the Indian pharmaceutical companies have to invest anywhere between INR 300-325 crore in the coming years under Corporate Social Responsibility (CSR) scheme.

Few pharmaceutical companies have already implemented CSR activities and published their contribution towards social activities. As per the Pharmabiz review, nearly 79 pharmaceutical companies will have to spend two per cent of their average net profits on social activities which comes to around  INR 325 crore.

The Bill seeks to consolidate and amend the law relating to the companies and intends to improve corporate governance as well as strengthen regulations for participation of corporates in social welfare. According to the corporate affairs ministry, India will be the first country to include provisions on CSR in its company law. CSR can be understood as a management concept and a process that integrates social and environmental concerns in business operations and a company’s interactions with the full range of its stakeholders.

As per the latest changes, every company having a net worth of 500 crore or turnover of  1,000 crore or an average net profit of 5 crore in last three financial years would have to implement CSR practices and spend at least two per cent of average net profit in the preceding three years on CSR every financial year. If the company fails to implement CSR, the board of directors would have to state the reasons in its report.

For the complete article, click here.

Source : PharmaBiz
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