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 spendings 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.
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.
Interestingly, the CSR spending of just 5% or 346 companies was Nil in FY17, whereas during FY16, a whopping 48% or 9,218 companies spent nothing on CSR. This is really a great positive sign and shows the growing sense of responsibility among India Inc. However, this is just a provisional data for FY17 as many companies have not filed data due to new Ind-AS rule.
On the positive side, Rs. 9,596 crore was spent by 14,994 companies towards CSR during FY15, while 19,184 companies spent Rs. 13,828 crore during FY16 under this head. The data for FY17 is still pouring in but available figures show that 6,286 companies spent Rs. 4,719 crore on CSR.
Interestingly, the MCA has provided this data with a cutoff date of December 31, 2017 and many companies are still filing their balance sheets with annual reports to the Registrar of Companies (ROC) by paying late fee. Due to this, the CSR spending for FY17 will surely be much more. As per the MCA assessment, the CSR spending will surely cross the Rs. 10,000 crore-mark for FY17 as companies have now started taking the CSR rule seriously. The data compiled by the GDP for top 220 companies shows that total spending of mere 220 companies has touched Rs. 7939.45 crore.
During FY16 (the second year for mandatory CSR spending), 19,184 companies “reported” to the MCA regarding the CSR and 9,964 companies actually spent on CSR, that is around 52% of the total, and they took up 17,423 CSR projects to spend the amount. The number of projects undertaken in FY15 was just 7,959, while in the provisional data for FY17, the number of CSR projects climbed to 11,597 with just 6,286 companies, really a giant leap of India Inc. by any standard. What is encouraging is that many companies spent on CSR activities despite incurring losses during the previous years and this really calls for applause
At the same time, the GDP staff members have come across companies which hand over the CSR department/workload within the company to individuals who are either not exposed to or do not understand the nuances of any given social problem. But we are also aware of the fact that since the law is new, the thought and approach to it is evolving. And yes, things are looking up.
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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