Corporate Social Responsibility (CSR) has become an essential component of contemporary business operations. In India, CSR endeavors have witnessed substantial growth, not merely as a statutory obligation but as a genuine dedication to societal well-being.
From a Regulatory Standpoint: In India, the Companies Act of 2013 mandates CSR activities for certain businesses. According to this legislation, companies meeting specific financial thresholds must allocate at least 2% of their average net profit towards CSR activities. This legal requirement has led to a significant surge in CSR initiatives, which have positively influenced various sectors of society.
Over the years, CSR funds have predominantly concentrated on Education & Skills, and Healthcare & WASH (Water, Sanitation & Hygiene) projects, aligning with the categories outlined in Schedule VII of the Companies Act, 2013. Other noteworthy areas of funding include Rural Development, Environmental Conservation, and Gender Equality.
Trends in Indian CSR: Since the enforcement of mandatory CSR provisions in 2014, corporate India's CSR spending has experienced substantial growth. It has surged from INR 20,217 crore in 2018-19 to INR 26,278 crore in 2021-22. The proportion of companies surpassing the prescribed CSR expenditure has risen to 56.08% in 2021-22 from 22.97% in 2017-18.
Donations to the Prime Minister's National Relief Fund (PMNRF) more than doubled in 2020-21 compared to 2019-20, and donations to other Central Government Funds increased by 67% during the same period. Contributions to PMNRF have been escalating over the years, reaching INR 1679 crores in 2020-21 from INR 228 crores in 2014-15, marking an over 7-fold increase.
Healthcare and WASH have emerged as the primary CSR priorities for 26% of companies, followed by Environment and Sustainability (23%), and Education Promotion (23%). Environment and Sustainability have become the second most prominent CSR priority areas, attracting more than one-third and one-fourth of companies, respectively.
Welfare Impact of CSR : Through CSR initiatives, philanthropic efforts, and volunteerism, businesses can significantly contribute to social welfare while enhancing their brand reputations. Socially responsible businesses proactively integrate issues such as climate change, poverty, equality, diversity, and inclusion into their operational ethos.
Companies are nurturing India's human capital by investing in education, skill enhancement, and entrepreneurial programs. Collaborating with NGOs and vocational training institutions, they provide skill-based training to disadvantaged youths, thus fostering economic growth. A skilled workforce enhances productivity, elevates competitiveness, and propels economic advancement.
CSR initiatives are catalyzing social development in India by addressing poverty and advocating gender equality. Companies are actively involved in community development projects that empower marginalized populations through education, healthcare, and livelihood opportunities. Investments in telemedicine and digital health solutions are expanding healthcare access in remote regions.
The future of CSR in India seems to be increased seriousness for CSR activities and genuinely contributing to social wellbeing. Corporate Robin hoods are here to stay and make India a better place to stay for the needy.
ICC and CSR
ICC regularly organises CSR Awards for organizations doing outstanding work in Social Development. Some of the past winners are TRL Krosaki Refractories Limited (Belpahar, Odisha), ITC Limited, Munger Plant (India Tobacco Division), Dalmia Cement (OCL Bengal Cement Works, A Unit of OCL India Ltd) under Manufacturing & Processing, Bharat Aluminium Co. Ltd. (Korba, Chhatisgarh) under Mining Operation & Processes, Tata Consultancy Services, Kochi and WIPRO LTD., Saltlake Sector-V , Kolkata under Services sector.
