Two per cent of profits on CSR activities is a lot, says Azim Premji

Wipro Chairman Azim Premji may have personally contributed enormous sums to community development, but he opposes the mandated spending of 2 per cent of a company's profits on corporate social responsibility (CSR) related activities, as envisaged in the new Companies Bill.

Speaking at the All-India Management Association's (AIMA) 40th Management Convention in New Delhi on Thursday, he said: "My worry is the stipulation should not become a tax at a later stage ... Spending two per cent on CSR is a lot, especially for companies that are trying to scale up in these difficult times. It must not be imposed."

Premji also felt that a distinction should be made between personal philanthropy and CSR, which is a company activity.

However, he added that companies should wholeheartedly participate in CSR activities. They must also take care in choosing their focus areas. He believed that social good was not merely the government's responsibility and companies needed to step forward to become co-sharers of that goal.

Premji received the Managing India Award for Corporate Citizen of the Year at the convention.

The Wipro chairman himself has donated 8.7 per cent from his personal stock holding in Wipro as endowment for the Azim Premji Foundation and has gone on to pledge more.