CSR funds and social development in India
The roots of Corporate Social Responsibly (CSR) are much deeper than the inception of section 135 of the Companies Act, 2013, which known as Corporate Social Responsibility Policy. This act governed to certain companies, which qualify to such conditions as mentioned under Sub-Section 1 of Section 135 to comply mandatory Corporate Social Responsibility to solve India’s complex issues of development.
The term ‘CSR’ can also be understood as a corporate initiative to assess and take responsibility for the company’s effects on the environment and the impact on social welfare. CSR should not be seen as a charity or mere donations, it is also a way of conducting business by which an organization understand and evolved its relationship with stakeholders for the common good, and demonstrate its commitment by adopting appropriate business process and strategies.
CSR applicable for the companies, whose;
- Net worth of INR 500 crore or more
- Turnover of INR 1000 crore or more
- Net Profit of INR 5 crore or more during any financial year
As per the data available on the website (https://csr.gov.in/CSR/) designed to disseminate Corporate Social Responsibility related data and information filed by the companies registered with it, shows that rupees 13465 crores spent during the year 2016-17 on different developmental projects under CSR head. This amount was less 901 crore which spent under same head last year 2015-16.
As far as register companies with the website are concerned, figure 2 shows that more than 21 thousand companies were registered with portal during the year 2015-16 which subsequently declined to around 20 thousand companies in next financial year.
Out of total register companies (19933) to the portal, only 12 per cent (2347) companies are listed and available of trade on the stock exchange. There are a majority of companies still unlisted to stoke exchange and contributing to CSR funds.
Figure 3 shows, more than 21 thousand CSR projects were running in different states and UTs in India under 29 different development section during the year 2016-17. Despite decreasing spent CSR and registered companies, the number of running CSR project regularly increasing every financial year. This clearly shows, the projects are unentrapped in the development sector and have significant liquidity in the sector.
The finance minister of India, Mr Arun Jaitley himself announced recently that CSR funds worth rupees 8,314 crores remained unspent over three financial years.
He disclosed that in 2014-15, the prescribed CSR amount was Rs 15,251.32 crore but Rs 5,185.39 crore remained unspent. In 2015-16, the figure was Rs 15,256.20 crore whereas Rs 889.91 crore was not spent, the data showed. In 2016-17, the prescribed amount was Rs 15,705 crore, while Rs 2,238.78 crore remained unspent.
Top CSR contributors of India
India has a vast network of companies that are working in different domains nationally and internationally. It is also important to analyze CSR contribution company wise figure 5 shows that Reliance industries were on the top for CSR contribution with 649.26 crores followed by Oil and natural gas corporation (504.91 cr.) and TCS.
Details of spent CSR amount (development sector wise) for 2016-17 given in figure 6, which shows that 38 per cent of national CSR amount spent for education, differently abled and livelihoods programs. Second highest development sectors are health, eradication hunger, poverty and malnutrition where 25 per cent of CSR amount spent to run the different development programs. There were 11 per cent amount specifically spent on rural development programs. However, Clean Ganga fund is showing zero per cent in respect to the total amount, but rupees 24 crores were spent for this initiative during the year 2016-17.