New Delhi, Sep 26 - Finance Minister Arun Jaitley on Tuesday said the CSR spend of corporates, which has become functional in the last three-to-four years after the Company Law was amended, can significantly support the public expenditure of the government.
"Governments at the Centre and in states spend money. If this (corporate social responsibility spend) comes as supportive expenditure, it can add significantly," Jaitley said at the Axis Bank CSR programme here.
He said that in 2013 when the Company Law was amended and CSR (corporate social responsibility) was made mandatory out of profits, it was thought to be an additional tax by a section of the industry. "That was the first reaction."
"But in these three-to-four years, we have seen it function," Jaitley said.
Elsewhere in developed economies, corporate charity was always a very important instrument of service, he said.
"Conventionally that didn't exist in India. Charity in India was always identified with communities. It was only in the last decade or so that the concept of service to society through corporate instrumentalities begun."
The Finance Minister added that the choice of destination where the CSR spend should go is extremely important.
"There are a number of obvious areas where improvement is required. There are areas in geographical and social sectors, which are more challenging to reach," he said referring to the Axis Bank's CSR project which is targeted towards the upgradation of over a 104 schools in the areas surrounding Leh and Kargil in Jammu and Kashmir.
"CSR initiative of Axis bank has reached the most disadvantaged part of India. People representing these regions explain how everything located at distance costs more. And the ability to generate more income to match this cost is not there.
"Being smallest, Leh and Ladakh's voice is less audible than the other regions. Axis Bank has done a commendable service by bringing the region to the forefront. Spending the large part of CSR resources in upgrading the schools is an extremely important step," he said.
Jaitley said education was an important sector for CSR activities.
"Education is actually a great leveller and the level playing field can be provided by either state assistance, corporate assistance through CSR or promoting industries like tourism," he said.