Thursday, November 30, 2023

CSR – A catalyst for growth


By Sushmita Singha

CSR or Corporate Social Responsibility is a sensible way of the large conglomerates to give back to society and do their bit to assist the society for development and betterment. While many companies indulge in CSR activities truly focusing on the societal benefits, many focus on the benefits they themselves can get out of that through tax and other benefits.

CSR or Corporate Social Responsibility is a matter of great sensitivity, in spirit, it’s neither charity nor just compliance. We live in a society where ‘have nots’ outnumber the others, by far. A society with less disparity is better for the health of the country. It means, more education, population control, lesser crime, more awareness, better health, less pollution and a better economy amongst other things.

Companies Act was enforced in 2013 and on 1st April 2014, India became the first country to make Corporate Social Responsibility mandatory. The total CSR spend as reported by the Govt between 2014-2019 was Rs 100,000 Cr.

The government has defined specific areas where CSR funds can be spent and they cover a wide range to help the nation bridge the wide gaps. The question is how many companies are doing this in true spirit. It is common knowledge and recorded in many studies on CSR spending, that many companies do not have a proper mandate resulting in ad-hoc expenditure.

India Inc’s CSR spending grew 3.62 per cent (CRISIL) to Rs 22,000 Cr in FY’21.

Many NGO’s are given money with an understanding that they return a certain percentage, at times up to 90 per cent, back to the company. Therefore, the work done on paper is not work done in reality. There are instances of homegrown NGO’s managed by relatives of promoters where payments are made to staff, expenses are booked for non-CSR work in the name of CSR projects. Unethical practices of this kind murder the very spirit of CSR.

It is interesting to note that India Inc’s CSR spending grew 3.62 per cent (CRISIL) to Rs 22,000 Cr in FY’21 and most of the funds were allocated to covid related projects. A large chunk of funds was given to PM CARES fund by PSUs, they outspent 126 per cent, followed by MNC’s- 109 per cent, promoter-driven companies- 106 per cent and widely held companies-103 per cent.

79 out of the 100 BSE companies spent 2 per cent or more of their 3-year average net profit on CSR.

79 out of the 100 BSE companies spent 2 per cent or more of their 3-year average net profit on CSR. Those who did not spend the stipulated amount blame it on implementation problems, lack of meaningful projects so on and so forth. In a country like India, these grounds seem so lame and is an obvious effort to save the funds.

Many grassroot NGO’s struggle to support their ongoing projects, many who are not so technically savvy are unable to reach the funders. To my understanding the responsibility of a company does not stop at disbursing the fund for a project,  it is important to identify the right partner, help them upgrade their skills, if required, monitor the project and in the end, do an impact assessment. The impact is not always as desired because often the project intervention deals with human beings who over generations are conditioned in a particular way. In such cases, it becomes worthwhile and rewarding to continue with empathy.

Corporate Social Responsibility is a catalyst to build a strong and sensitive nation, provided all become fair players.

Also Read: #hypevalue: Unreal valuation. Real hype.

(Sushmita Singha is Founder MA, My Anchor Foundation and JAL Water Museum.)

(Disclaimer: The views expressed in the article above are those of the author’s and do not necessarily represent or reflect the views of Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.)


Please enter your comment!
Please enter your name here

Share post:


More like this

Navigating the path to sustainable energy: Trends and challenges

With climate change and its adverse impacts on mankind,...

Unmasking Artificial Intelligence: The game changer in today’s digital revolution

Artificial Intelligence (AI) has been garnering a lot of...

The growing need for security at the Edge

By Rahul S Kurkure With the growing focus on cybersecurity,...

Improving mental health in India: Challenges before us

By Siddhartha Mitra Mental health remains a major issue in...