Marking higher spending towards CSR works, companies shelled out Rs 8,300 crore for such activities in the last financial year, says a report. Crisil Foundation today said companies’ CSR spending rose 22 per cent, with much of the amount going towards education, skill development, healthcare and sanitation initiatives. Under the Companies Act 2013, a certain class of profitable firms is required to cough up at least 2 per cent of their 3-year annual average net profit towards corporate social responsibility (CSR) activities.
In a report, Crisil Foundation said CSR spending in absolute terms went up by Rs 2,500 crore to Rs 8,300 crore in fiscal 2016. Another Rs 1,835 crore needed to be spent for the average to achieve the mandated 2 per cent, it added.
The report said that in 2015-16, as many as 1,505 companies, or 30 per cent of the 4,887 entities listed on the BSE, met the CSR spending criteria. “Of these, 77 per cent, or 1,158 companies, reported on their CSR activity, compared with 1,024, or 75 per cent of the 1,300 firms eligible in 2014-15.
“These 1,158 companies also spent a lot more money compared with fiscal 2015, which led to a 29 basis points of improvement in average spending to 1.64 per cent compared with 1.35 per cent in fiscal 2015, moving closer to the 2 per cent mandate,” it noted. According to the report, of the 1,024 companies that figured in the analysis in the previous year, 917 continued to meet the CSR criteria in 2016.
You May Also Like To Watch This:
“In fiscal 2015, smaller companies had spent relatively more, but in fiscal 2016, the larger ones have done well with more than half of them adhering to the 2 per cent mandate versus approximately a third previously,” it added. Interestingly, both public and private sector companies improved their CSR spending. However, the public undertakings made distinct progress.
“This public-private complementarity is great to see because as a percentage of total government expenditure, India spends significantly less than what other BRICS nations do. So, the private sector ramping up where government spending is low is truly synergistic CSR,” said Ramraj Pai, President, Crisil Foundation. Crisil Foundation is part of leading analytics firm Crisil.