When Modi’s Swachh Bharat went on full steam, companies cut contribution to sanitation

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Updated: February 21, 2020 11:06:20 AM

The overall Corporate Social Responsibility (CSR) expenditure by the Indian companies fell 6 per cent in two years to FY18.

sanitation, CSR expenditure, CSR funds, private companies' CSR amountThe Indian companies spent Rs 631 crore on sanitation-related issues in FY16, which less than halved to Rs 291 crore in FY18. (Bloomberg image)

While Prime Minister Narendra Modi was holding a broomstick in his hands to spread awareness about the Swachh Bharat Abhiyaan, companies in the country substantially cut expenditure on major issues such as sanitation. The Indian companies spent Rs 631 crore on sanitation-related issues in FY16, which less than halved to Rs 291 crore in FY18, according to the data provided by Anurag Singh Thakur, MoS for Finance and Corporate Affairs in a reply to a question in Lok Sabha. Even the CSR amount spent by the companies to fight poverty, hunger, and malnutrition halved from Rs 1,252 crore in FY16 to Rs 635 in FY18.

The overall Corporate Social Responsibility (CSR) expenditure by the Indian companies fell 6 per cent in two years to FY18. The highest fall in the CSR spendings was observed in Andhra Pradesh where the expenditure fell from Rs 1,294 crore to a mere Rs 269 crore in the same duration.

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The fall in the overall companies’ CSR expenditure is primarily due to the low spendings of the PSUs. The CSR expenditure of the PSUs fell from Rs 4,214 crore to Rs 2,553 crore in two years while that of the private companies marginally rose in the two years to FY18.

CSR expenditure is compliance that is mandated by the companies act. Every company having net worth of Rs 500 crore or more, or turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more during the immediately preceding financial year, has to spend at least two per cent of the average net profits made during the three immediately preceding financial years, towards CSR in any of the eligible activities enlisted by the government. CSR is a board-driven process and the board of the company is empowered to plan, decide, execute and monitor the CSR activities of the company based on the recommendation of its CSR Committee.

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