Mandatory CSR is akin to extra tax, says Ratan Tata

Mumbai: Mandatory CSR spends for companies are “like a tax” and the government needs to help identify beneficiaries, Tata Group chairman Emeritus Ratan Tata said on Sunday, adding that philanthropy is an act which comes from within.

“Philanthropy or giving is something that comes within you and you obviously create another motivation when you mandate that you will give ‘x’ or ‘y’,” Mr Tata said, in comments that come days after Facebook’s founder Mark Zuckerberg announced a plan to donate 99 per cent of his $45 billion fortune.

On government making corporate social responsibility (CSR) spends mandatory for companies above certain threshold at 2 per cent of profits, Mr Tata said, “The mandated 2 per cent the government has (enforced) becomes like a tax”. He, however, stressed that a big amount of money gets generated through such contributions and it can be utilised better if the government can clearly identify projects or sectors which are need of funds.

Mr Tata, who retired as the chairman on Tata Sons in 2012 after being at the helm for over three decades, said that Tata Group companies have been devoting up to five per cent of their profits for CSR for many years now.

Refusing to be drawn into a debate of ‘good philanthropy’ versus ‘bad philanthropy’, Mr Tata said that giving is a new phenomenon which needs to be given its time and space to grow.