Giving Compass' Take:

• India Development Review unpacks corporate social responsibility (CSR) in India following the implementation of mandatory CSR. 

• How can this information be used to improve CSR efforts in India? 

• Learn about the evolving role of  CSR teams in India. 

Is corporate India complying with the CSR mandate? When they do, how much do they spend on social projects? Which sectors do they invest in primarily? And how is their funding distributed among states?

To answer these questions, Ashoka University’s Centre for Social Impact and Philanthropy has released a report—the first comprehensive study of this kind, with source data1 scraped directly from the Ministry of Corporate Affairs database. The database, detailing corporate sector spending reported under the Companies Act 2013, contains data from more than 19,000 companies across India.

And the data has a lot to say. The CSR spend of all 19,184 companies in 2015-16 was equivalent to the combined quarterly net profit of just two companies—Reliance Industries and ONGC in Q1, 2018. And while companies have now had quite some time to address initial teething problems with their CSR, and formulate better strategies, the numbers suggest that there are still large discrepancies in the way CSR projects operate.

Nearly 44 percent of CSR projects are located in the four states that hold just a fourth of India’s population—Maharashtra, Tamil Nadu, Karnataka, and Gujarat, while densely populated states like Uttar Pradesh and Bihar get just a fraction of this.

Highlights:
  • In 2015-2016, the total CSR spend was INR 13, 966 crore, equivalent to the combined quarterly net profit of Reliance Industries and ONGC (Q1, FY 2018).
  • When trying to calculate whether companies adhered to the mandatory-minimum two percent CSR spend rule, the report found that 10,674 companies–56 percent–out of 19,184 had not provided either their net profit or CSR spend. From the companies that did, just 40 percent have complied with the rule, spending two percent or more of their average net profit.
  • In terms of number of CSR projects, 43 percent of companies implement the project themselves directly, but when you look at it in value terms, 37 percent of companies operate via implementing agencies.
  • Maharashtra, Tamil Nadu, Karnataka, and Gujarat—just four states—are home to 54 percent of CSR companies. Conversely, states like Uttar Pradesh and Madhya Pradesh, accounting for 23 percent of India’s population, have among the lowest share of CSR companies—just 3.3 percent.

Read the full article about CSR in India by Ayesha Marfatia at India Development Review.