Shiv Nadar, Founder Chairman of HCL Technologies, today supported the mandatory 2 per cent spending on corporate social responsibility (CSR).
The chief of India's fourth largest IT services exporter said the Shiv Nadar Foundation (SNF), founded in 1994 to focus on philanthropic activities in education, has committed Rs 3,000 crore for the next five years and a long-term commitment of USD 1 billion (about Rs 6,000) for expansion of activities of the foundation.
"I personally do," Nadar said when asked by reporters whether he welcomes the mandatory 2 per cent CSR spending by corporates.
Under the new Companies Act, 2013, all profitable companies with a sizable business will have to spend every year at least 2 per cent of three-year average profit on CSR works.
This would apply to companies with a turnover of Rs 1,000 crore and more, or networth of Rs 500 crore and more, or a net profit of Rs 5 crore and more. The new rules would be applicable from fiscal 2014-15.
Earlier in September, India's third largest software services exporter Wipro's Founder Chairman Azim Premji had said philanthropy cannot be forced upon.
"They are trying to force something. It should be spontaneous," Premji had said in September this year referring to the issue of mandatory CSR spending.
When asked whether corporates should have lesser taxes and more philanthropic activities, Nadar said: "That is for the state to do. Yes, but first we have to prove that, you know, private corporations will have to prove this."
On the spending commitments of SNF, he said the foundation has committed Rs 3,000 crore towards educational initiatives and expansion programmes over the next five years.
Speaking on the occasion of the foundation completing 20 years, Nadar said: "We have a long-term investment aim of USD 1 billion (about Rs 6,000) crore."
He did not elaborate on time period of this investment.
Roshini Nadar Malhotra, Nadar's daughter and an SNF trustee, said the Foundation has invested Rs 1,800 crore till March 2013 and an additional investment of up to Rs 1,220 crore is expected by the end of the current fiscal.
"SNF has directly impacted 15,000 students and has created 2,000 first generation learners in the last 20 years," she added.
When asked how does the foundation receives its funding, Nadar said the foundation gets dividends from HCL firms. The foundation has a corpus fund which is utilised for expansion activities.
Releasing SNF's report, which will now be a yearly feature, Nadar said: "The