When last year, the GDP Magazine decided to bring out a comprehensive annual issue on CSR, particularly on the CSR spendings, we were caught up in a real mess. Though the whole world is buzzing with the term CSR, when it comes to authentic data on CSR spending by individual companies, there is a real dearth of database. As mandatory CSR spending got legal sanctity only recently, the availability of data is a big problem as companies avoid giving the real figures because majority of them remain defaulters, by spending less than the prescribed CSR expenditure, Reports Amit Bhanot in the Cover Story of Governance Democracy & Politics (GDP), 2nd Annual Issue on CSR
Also, there is still confusion in the corporate about which activities qualify for CSR and how the CSR budget is to be spent upon various activities. As far as data is concerned, during FY17 (it being the third year after CSR spending became mandatory), Reliance Industries Ltd. remained at the top of the list of Top Spenders with Rs 674 crore CSR spending (an increase by Rs 22 crore over FY16), followed by ONGC, TCS, HDFC Bank and Infosys. Interestingly, HDFC Bank and TCS toppled NTPC and ITC (Rs 421 crore) as the biggest CSR spenders with Rs 380 crore and Rs. 305 crore spendings respectively. The top 10 companies contributed Rs. 3,322 crore towards CSR in FY17 against Rs. 3,024 crore in FY16. Importantly, out of a total of 6,286 companies 2,203 companies (35%) spent more than the prescribed CSR amount in FY17, while 3,718 companies spent less than the prescribed amount.
CSR or Corporate Social Responsibility, though present in our corporate value system since ages, came to limelight recently when CSR spending was made compulsory under the new Companies Act, 2013 for all corporate. While compulsory CSR campaign took off with a humble start, it has now clearly transformed into a vibrant campaign of great nation building exercise as only in the second year i.e. FY 2015-16 a whooping Rs. 13,828 crore (by 19,184 companies) was spent on various developmental projects as against Rs. 9,565 crore (by 14,994 companies) during FY 15, an increase of 44.6%. Interestingly as per the provisional data of the Ministry of Corporate Affairs (MCA). during FY17, 6,286 companies spent Rs. 4,719 crore on CSR as many corporate big guns had not filed their company returns due to more time given by the government to file their FY17 returns as per Indian Accounting Standard (IND AS) to listed and unlisted companies having net worth of more than Rs 500 crore. Due to this many companies had not filed their returns of FY17 till the last date of filing i.e. December 31, 2017.
To analyse the CSR spending trend by companies, Governance, Democracy and Politics (GDP) Magazine decided to compile the data on CSR spending by top 220 companies in the last three years (since FY15 when CSR became mandatory) from various sources like annual reports, MCA data, CSR statements of companies etc.
This compilation has given interesting insight into the trend of CSR spending by Indian corporate as the top 220 companies spent around Rs. 7939.45 crore on CSR projects in FY17, while they shelled out Rs. 8114.7 crore during FY16, a substantial decrease of Rs. 175.3 crore on year on year basis. This is mainly due to two reasons; firstly, the profits of companies got a beating due to slackening of the economy during the three years preceding FY17 and, secondly, many companies did not spend the required CSR amount under Companies Act, 2013 and carried forward the unspent amount to next year.
This article is part of 2nd Annual Issue of GDP Magazine on CSR. Governance Democracy& Politics (GDP) Magazine’s Special Issue on #CSR Takes A Deep Dive on the state of CSR Spending. It has a regressive database of 6000+ companies on CSR Spending.
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