Over 1,000 BSE-listed companies together shelled out Rs 6,400 crore towards CSR activities last fiscal, with funds going to education, health and other areas, says a report.
The findings are based on an analysis of disclosures made by 1,181 BSE-listed companies, done by CII-ITC Centre of Excellence for Sustainable Development. These firms were required to comply with Corporate Social Responsibility (CSR) norms under the Companies Act, 2013.
Under the Act, certain class of profitable entities are required to spent at least two per cent of their three-year annual average net profit towards CSR activities. The norm came into force from April 1, 2014.
More than 90 per cent of the 1,181 companies complied with CSR norm and “around Rs 6,400 crore has been spent” in the last financial year, according to the report.
“Almost 55 per cent of that has been channelled to education, skills, livelihoods, health and sanitation. Most of the companies have projects in industrialised parts of the country, with Maharashtra and Gujarat leading the pack.
“Only about two per cent of the Rs 6,400 crore was spent towards Prime Minister’s Relief Fund,” it noted.
CII-ITC Centre of Excellence for Sustainable Development is a joint venture between industry body CII and diversified group ITC.
As per the analysis, 87 per cent of the eligible listed companies have actually spent on CSR but 52 per cent shelled out less than the two per cent requirement.
“83 per cent of those 52 per cent of the companies have given reasons for underspend,” the report said, adding that most firms initially lost time in understanding “a fairly complex piece of legislation”.
The other reasons for spending less are projects being multi-year or that they could not find right projects or implementing agencies, it added.
As many as 97 per cent of the companies analysed had board-level CSR committee while 94 per cent had CSR policy in place.
Mukund Rajan, who is Co-chair of CII’s National Committee on CSR, said the results of the analysis should put many discussions on the subject in perspective.
“Corporate India has clearly attempted to contribute to nation building which was government’s and Parliament’s purpose of legislating CSR,” Rajan said.
Rajan is a member of the Group Executive Council at Tata Sons as well as Tata brand custodian and group spokesperson.