Among the top 100 companies there are just 23 public sector undertakings but they spent Rs. 2,284 crore during FY17, which is more than 33% of the total CSR spent (Rs. 6,882.74 crore) by the top 100 companies in FY17, while during FY16 these PSUs spent Rs. 3,312 crore on CSR, cornering 46% share in the total money spent under this head. Needless to say, the performance of PSUs has clearly declined in terms of CSR spending in the third year since CSR spending was made compulsory in FY15 but despite this decline, they still remained the cornerstone of India’s CSR spendings., reports Aruna Sharma in the Governance Democracy & Politics (GDP), 2nd Annual Issue on CSR
- Government Companies’ Performance In Terms Of CSR Expenditure Much Better Than Private Companies
PSUs like ONGC, NTPC, Indian Oil, NMDC, PFC, Coal India and HPCL were among the top 20 biggest CSR spenders — seven out of the top 20 corporate being PSUs. Importantly among the top 30 corporate CSR spenders, 13 companies belong to PSU space, showing the commitment of public sector undertakings towards social responsibility in the country.
Many Companies Still Have To Change Their Mindset
Even though Corporate Social Responsibility has been the buzzword for Corporate India for quite some time, now there is a mad rush among companies to show themselves off as socially more responsible. Interestingly, companies are even going all out to advertise heavily that they are much more responsible towards society. But if we look at the real performance of companies towards CSR spending, this whole exercise seems to be just eyewash by majority of them, especially the private companies. Many companies are still quite reluctant to spend on CSR despite it being compulsory under The Companies Act, 2013.
If we look at the data compiled by the MCA during FY16 as per which 19,184 companies spent a whopping Rs. 13,828 crore on CSR, we see that just 3,380 companies spent more than the prescribed amount on corporate social responsibility activities, while 9,219 companies spent nothing under this head and another 6,268 companies spent less than the amount they had to spend under the Companies Act, 2013. This clearly shows the reluctance of companies towards CSR spending.
During FY17 also, out of the 6,286 companies whose data were compiled by the MCA till June 2018, the CSR spendings of 346 companies remained nil, while 3,718 companies spent less than the prescribed amount on CSR. On the positive side, 2,222 companies spent more than or equal to the amount prescribed under the Companies Act. This is certainly a great improvement in terms of percentage over FY16 level as more than 35% companies have shown their responsibility towards society and spent enough out of their pockets.
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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