Now Corporates May Adopt A Municipality

The government is planning to launch ‘adopt a municipality’ programme to encourage the participation of India Inc in the flagship urban development schemes such as Smart Cities Mission and Swachh Bharat Mission through the corporate social responsibility (CSR) fund.

“Many corporate are interested to invest in the urban development scheme like Swachh Bharat Mission and Smart Cities Mission as a part of their CSR initiative, without getting involved directly," said a senior official from the Ministry of Housing and Urban Affairs.

Through this scheme, the corporates can select one or many municipalities and can contribute to the areas of their interest. Also, they will be able to monitor where the money is spent.

The official said that the move was under consideration and it will make participation of corporates easier in urban development schemes.

According to India CSR Outlook Report 2017 by NGOBox (a corporate social responsibility (CSR) research platform in India), As many as 300 companies spent Rs. 6,871 crore on CSR in 2016- 17 out of which Rs 501 crore were dedicated to the flagship programme Swachh Bharat Abhiyan.

Accounting for Swachh Bharat related programmes were 7.3 per cent of the total CSR spent with an additional Rs. 33 crore for the urban slum development programme.

On the other hand, corporates chose to invest mainly in education and health projects which received 32 per cent of the CSR money.

State-owned public sector units (PSU), private businesses and philanthropic individuals contributed Rs 245 crore to the fund's pool in the 2016-17 financial year, however, the move was primarily led by PSU, contributing Rs 212 crore. While lesser-known private companies, charitable organisations and individuals contributed Rs 33 crore to these schemes, large corporate conglomerates gave it a miss and contributed mainly to education and healthcare.

The central government had set-up Swachh Bharat Kosh (SBK), a corpus to mobilise funds for building toilets across the country from corporate and private donors. The move generated the huge response from the corporates like Bajaj, Larsen and Toubro, Nestle, ITC, GE, and Merrill Lynch, who were among prominent donors. However, the interest started dwindling in the last financial year.

State-owned public sector units (PSU), private businesses and philanthropic individuals contributed Rs 245 crore to the fund's pool in the 2016-17 financial year. But the bulk of the money, Rs 212 crore, came from PSUs and large business houses gave it a miss. Another Rs 33 crore came from lesser-known private companies, charitable organisations and individuals.

One of the reasons for the lack of interest is because larger business houses prefer to engage in projects where they have direct say and can monitor the outcome. They do not find the existing CSR system transparent as private entities contributing less than Rs 10 crore to the corpus don’t have the power to influence or decide where and how the money should be spent.