Indian companies hike CSR spending towards education to boost skilling
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As the government brings forward a new scheme requiring companies to use their Corporate Social Responsibility (CSR) funds to cover 10 per cent of internship costs, education constituted nearly 33 per cent of the CSR spending by companies in FY23 -- the largest ever.
The amount spent by companies on imparting vocational skills under CSR reached Rs 1,164 crore in FY23, up from Rs 1,033 crore in the previous fiscal, according to government data.
In the Union Budget 2024-2025, Finance Minister Nirmala Sitharaman announced a new scheme for companies to use their CSR funds to cover 10 per cent of the internship costs.
A company must comply with CSR provisions under Section 135(1) of the Companies Act, 2013, and the Companies (CSR Policy) Rules, 2014, if it meets certain criteria, like net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more.
The new initiative by the government aims to create skilling opportunities for one crore youth in the top 500 companies over the next five years. Under the new internship scheme, each intern will receive a monthly allowance of Rs 5,000 and a one-time assistance of Rs 6,000.
According to the Budget document, it will provide 12 months of real-life business exposure while participating companies can cover training costs and 10 per cent of the internship costs from their CSR funds.
Jayant Chaudhary, Minister of State for Skill Development and Entrepreneurship (Independent Charge), said that the scheme bridges the gap between academic knowledge and industry requirements, empowering young individuals with practical experience and financial support.
The scheme also aligns with broader goals of improving employability, stimulating economic growth, and promoting sustainable development.
Industry experts have also hailed the new initiative, saying that it is poised to bridge the gap between academic learning and practical industry experience, creating a more skilled and job-ready workforce.
According to them, such a workforce is crucial for sectors like real estate, where practical skills and experience are highly valued.
Meanwhile, the government also plans to incentivise 30 lakh youth entering the job market by offering a one-month PF contribution.
