Dipesh Shrestha/Republica Minister for Industry Nabindra Raj Joshi (right) speaks at an interaction with private sector representatives at the Ministry of Industry in Singha Durbar, Kathmandu, on Monday.
Private sector will have representation in the CSR Fund: Minister Joshi
KATHMANDU, April 18: The Ministry of Industry is preparing to set up a Corporate Social Responsibility (CSR) fund and operationalize it in coordination with the private sector.
Speaking at an interaction with some leading business executives of the country in Kathmandu on Monday, Minister for Industry, Nabindra Raj Joshi, said that the ministry would soon draft a working procedure to set up and operationalize the fund collected from business firms as their CSR contribution.
Concluding that the CSR effort by individual firms was becoming less effective and failing to reach the target beneficiaries, the ministry is taking the initiative for setting up CSR fund and run it on its own.
Though the private sector has been doing CSR activities on their own on a voluntary basis, the Industrial Enterprises Act, 2073 (2016) requires companies and firms with annual turnover above Rs 150 million to spend at least 1 percent of their net profit in CSR activities.
“The motive of setting up the fund is to bring together CSR funds of various companies and operationalize it in coordination with the private sector,” Joshi said. He also said that the ministry would form a committee to work on the working procedure to set up and operationalize the fund.
Leaders of various business firms and industries, however, have voiced concern over the possibility of other ministries stepping in to operationalize the CSR fund. While some of them expressed interest to use the CSR fund on their own, others said that the mobilization of funds collectively would be more effective.
“If we collect funds and spend it in a collective way, it would be a big and substantial work toward giving back to the society,” Kush Kumar Joshi, a former president of Federation of Nepalese Chambers of Commerce and Industry (FNCCI), said. “The biggest CSR initiative should be to help in job creation,” he added.
Similarly, Ravi KC, vice president of Surya Nepal Pvt Ltd, said that operation of CSR funds by a ministry might not be effective. “We have already been contributing huge amount of money in a welfare fund. However, we do not what is happening with that fund,” he said, adding: “While it is a good initiative by the ministry, the fund may remain idle once the minister leaves the office.”
Some of the leaders of the private sector also opined that the cash spent by business firms should be deducted from tax liabilities.
Responding to the private sector leaders, Shankar Prasad Koirala, secretary at the Ministry of Industry, said that the ministry would address the concerns raised by the business executives while drafting the working procedure. “Business firms would also be interested on how and on which sectors their money will be spent. This is not going to be the fund operationalized solely by the ministry. There will be representation from the private sector as well,” he added.