CSR: Giving can't be forced, says Premji

Referring to the issue of corporate social responsibility (CSR), being made mandatory by the new laws that govern companies, information technology czar Azim Premji on Thursday said philanthropy cannot be forced and has to be spontaneous.

Premji, founder-chairman of Wipro, India's third largest software services exporter, said, however, efforts towards social good needed to be "meaningful" and the government alone was not responsible for "social good".

Premji was speaking at the All India Management Association (AIMA)'s 40th national convention in New Delhi.

The billionaire philanthropist added giving back to society is important for the growth of a better world but it should come from within.

Premji said the stipulation of spending two per cent of profits should not become a tax at a later stage.

Under the new Companies Act, all profitable firms with a sizable business will have to spend every year at least two per cent of three-year average profit on CSR works.

This would apply to companies with turnover of Rs 1,000 crore and more, or net worth of Rs 500 crore and more, or a net profit of Rs 5 crore and more. The new rules, applicable from financial year 2014 -15, also require firms to set up a CSR committee of their board members, including at least one independent director. However, Premji said: "If things have to change in the society, then the involvement of the whole ecosystem is must. One cannot rely on government alone to do social good and one has to become a co-sharer of the goal and the outcome." Outlining the key factors for making CSR successful, he emphasised on the need to define the purpose and scale of CSR activities and choose a focus area.

Premji cautioned against making CSR a substitute for personal philanthropy. "There should be a distinction between a company activity which is CSR and personal activity that is philanthropy," he added.