India’s CSR Story

India’s CSR Story

Published on : August 7, 2020

Five years, 29655 companies, 71909 Crore and counting – India’s CSR story

In 2014, India became the first country in the world to mandate CSR spend through legislative action. The legal mandate on CSR applies to companies that have:
  • Net worth of INR 500 Crore or more, OR
  • Annual turnover of INR 1000 Crore or more, OR
  • Net profit of INR 5 Crore or more.
Companies thus coming under the CSR mandate, have to spend at least 2% of their average net profits of the preceding three years on social impact programmes in every financial year. In the first 5 years of implementation of this law, nearly INR 72000 crore has been cumulatively spent over a period of 5 years by over 29000 companies.

While the numbers have gone up, the spending patterns seem to be extraordinarily sticky. Here is a summary of top trends:

The pattern remains similar when we dig deeper. Regions with better corporate presence receive greater share of the CSR pie.

This spending pattern leads to an unfavourably skewed distribution of CSR funds, with underdeveloped regions with low income levels receiving the least of CSR support.

In terms of the sectors too, the distribution of CSR is heavily skewed in favor of select sectors – education being the overwhelming favourite.

This year, the unprecedented challenges brought by COVID prompted many companies to deploy their CSR funds in addressing the immediate needs of communities and the society at large. The impact on other projects that were dependent of CSR funding will be felt for some time to come.

This is the current landscape of CSR in India. Changes on multiple fronts are expected - amendments to the CSR law, CSR escrow accounts, changes in the grantee eligibility criteria, Social Stock Exchange and more. We hope that these changes will help CSR evolve in the right direction of companies truly playing their role in advancing social impact in a more sustained and effective manner. Meanwhile, we encourage companies to give due importance to CSR as a strategic business function that will add to long term sustainability and value for the company as well as the society that it is part of.

Our latest CSR report with 70+ reusable graphs is here : https://www.indiadatainsights.com/product/the-state-of-csr-in-india-2014-19/

CSR profiles of 29000+companies and district-level dashboards are available to subscribers. https://www.indiadatainsights.com/subscribe/

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