CSR Spending in India Rise up by 14%
Indian corporations increased their CSR spending, which has seen 14% rises over the last two fiscal years, despite a moderate growth in net profits. Crisil Foundation based the finds on an analysis of 1,186 eligible and listed companies. “Over the past two fiscals, the amount spent on corporate social responsibility (CSR) has surged at a compound annual growth rate of 14 per cent, despite a lukewarm 5 per cent growth in net profit,” the survey showed. It said more numbers of corporate are using non-government organisations (NGOs) as implementing agencies for CSR spending. “As many as 74 per cent of the eligible companies, including two-thirds of the small ones, used implementing agencies (NGOs) last fiscal when spending on CSR,” it said.
Mr. Ramraj Pai (Crisil Foundation’s President) quoted, “An increase in the limit can ensure a more direct involvement of companies by helping them build bigger teams for CSR. Also, as the use of implementing agencies is inevitable for execution, steps can be taken to promote bench-marking of NGOs to gauge their execution capability and usher in standardisation,”
The survey, however, indicated that almost two-thirds of the respondents had less than five dedicated personnel for CSR activities, indicating companies have under-invested in building their own capacity to provide strong oversight. It said the stipulation that overhead costs cannot exceed 5 per cent of the total CSR spend could be one of the key drivers for companies dedicating a small team for CSR.
Even before the Act came into existence, companies recognised they need to think about more than just profits – and did so. However, since CSR has become mandatory, companies have embraced social causes with fervour. They now apply the same rigour to causes as diverse – as hunger, poverty, healthcare, education, environmental sustainability, and rural development, as they bring to their business.