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Innovative Financial Advisors Pvt. Ltd. - Corporate Social Responsibility for SMEs

Finance

(Free Press Release) Innovative Financial Advisors Pvt. Ltd. believes that it should not be taken as a compulsion rather as a social responsibility. Each and every initiative no matter how small it is makes a big impact on overall development of the society.

Innovative Financial Advisors Pvt. Ltd. - Corporate Social Responsibility for SMEs


      

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Innovative Financial Advisors Pvt. Ltd. - Before understanding the role of MSME in CSR let us answer the following questions: What is SME? How do we differentiate MSME from other enterprises? What is CSR? Is CSR responsibility or a burden on corporate?

India is world's largest growing economy in the world. Service sector contributes 55.6%, Industrial contributes 26.3 % and Agriculture contributes 18.1% of the GDP of the nation. Service sector has shown growth over the years and is one of the largest employment generating sectors. Industrial sector which includes chemicals, pharmaceuticals, textiles, manufacturing, cement, mining, petroleum, machinery etc. is the second largest contributor to the GDP. Agriculture is the third largest sector in terms of GDP contribution.

MSME stands for MICRO, SMALL & MEDIUM ENTERPRISES, formed under Micro, Small and Medium Enterprises Development (MSMED) Act, 2006. Now the question arises which sector does MSME fall under, Service sector or Industrial sector.

 

SECTOR

INDUSTRIAL SECTOR :

Investment in Plant & Machinery

SERVICE SECTOR :

Investment in Equipments

TYPES OF ENTERPRISE

AMOUNT (INR)

AMOUNT (INR)

Micro Enterprise

Upto 25 Lakh

Upto 10 Lakh

Small Enterprise

Above 25 Lakh & Upto 5 Crore

Above 10 Lakh & Upto 2 Crore

Medium Enterprise

Above 5 Crore & Upto 10 Crore

Above 2 Crore & Upto 5 Crore

 

There are various other differences between MSME and a big Corporate other than the initial amount invested. It is largely seen in big corporations there is a fixed structure and hierarchy, the person is assigned fixed roles and duties which has to be accomplished in the stipulated time frame. Whereas in MSME's there is shortage of funds and mostly they lack structure and hierarchy, a person working in this domain has to have multitasking abilities. MSME faces multiple challenges every passing day right from ground level tasks like petty arrangements to bigger tasks like arrangement and management of funds and Scare Resources. Innovative Financial Advisors Pvt. Ltd. understands that some MSME have shown phenomenal growth over the years, the best example can be Shri Mahila Griha Udyog Lijjat Papad, popularly known as Lijjat, which started as an MSME with Rs 80. As the startup and has transformed into one of the biggest business unit.

Coming back to the question of CSR - Corporate Social Responsibility, in simple terms can be taken as an effort of corporate to pay back to the society which has helped it create its identity. Corporate invest in various activities like donation/ charity to old age homes/orphanage, free medical services to poor, education to unprivileged, hygienic food to deprived, free medicines to poor those in need etc. as their duty to societal upliftment. The concept of sustainable development is basically effective and efficient use of scarce resources keeping in mind the needs of future generations and resource availability. There are various small initiatives from corporate like tree plantation, water conservation and cleaning of water bodies, garbage management so as to maintain the ecological balance. Industries which result in deforestation must also take such measures to conserve natural resources.

Although it is the moral duty of corporate to take CSR as a primary responsibility but still some take it as a financial burden. With Ministry of Corporate Affairs (MCA) under section 135 and schedule VII of Companies Act,2013 making it necessary for any corporate with Net worth of 500 crore or Turnover of 1000 crore or Net profit of 5 crore to spend atleast 2% of their three year average net profit as their Corporate Social Responsibility initiatives. While for some big brands like TATA, WIPRO, RELIANCE it was a regular practice spending a proportion of their income as their CSR initiatives while for some it has also turned out as a mandatory burden.

With the latest amendments by the ministry of Corporate affairs, it does not implies that the organizations which fall under that bracket should contribute towards corporate social responsibility rather it should be taken as an initiative by each and every organization of the country to contribute something towards the society. Innovative Financial Advisors Pvt. Ltd. believes that it should not be taken as a compulsion rather as a social responsibility. Each and every initiative no matter how small it is makes a big impact on overall development of the society. By contribution it does not mean that only money has to be given as a charity or donation but there can be many small initiatives, for example corporate can encourage their employees to donate their old clothes which they do not use, old books and study material of their kids which they do not require anymore, zero food wastage at their in house canteens/cafe and providing that saved food to underprivileged, Donations does not mean that you have spend in huge amounts but even a small contribution say Rs 100 from each and every member of the organization can make a difference, educated people can teach uneducated people who cannot afford to go to school and there can be many such activities by which an individual as well as an organization can contribute to corporate social responsibility as their initiative. The more skilled people we have in our nation the better nation we build.

"CSR does not always require huge amount of investment rather requires sincerity of heart and an intent to bring happiness in someone else's life "

By Nitin

Sales Team – Innovative Financial Advisors Pvt. Ltd.

 

 

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Innovative Financial Advisors Pvt. Ltd. - Corporate Social Responsibility for SMEs

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