Listed companies' CSR spend tops Rs 100 billion in FY18, says report

Indian companies’ charitable spends rose for the third year in a row in 2017-18 to around Rs 100 billion in 2017-18. The 10.71 per cent growth rate in Corporate Social Responsibility (CSR) spends is higher than the previous year (7.63 per cent).

An analysis of figures from PRIME Database showed education topped the list of spends by category, which intermediaries are playing an important role in dispersal of funds, and that the biggest recipients of funds ironically were relatively rich states.

The analysis is based on an examination of 1,627 National Stock Exchange companies who have filed their annual reports. There were 1,080 firms left after eliminating ineligible companies and ones where data was not available. The total amount spent is up more than 50 per cent over the Rs 64.61 billion in 2014-15, the earliest year for which data is available (see chart 1 below).

Spending on education and vocation skills accounted for Rs 38.31 billion. This was the biggest category where companies spent money. Spends for helping with hunger, poverty and health care was second at Rs 24.85 billion. Environmental sustainability came in third with spends of Rs 11.82 billion (see chart 2 below).

These allocations remained constant over the last year, said Pranav Haldea, managing director of PRIME Database Group.

The Prime Minister’s Relief Fund saw allocations more than double, rising to Rs 1.72 billion. However, allocations to two key government programmes saw a dip. The Swachh Bharat Abhiyan allocations were down 10 per cent to Rs 5.2 billion while money towards cleaning the Ganga saw a 47 per cent fall to Rs 0.8 billion.

Oil and gas major Reliance Industries topped the CSR list. Its total expenditure was Rs 7.5 billion. Oil & Natural Gas Corporation came in second at Rs 5 billion. Tata Consultancy Services was third with spends of Rs 4 billion. There were two public sector, and three private sector firms in the top five list (see chart 3 below).

Intermediation played a vital role in the disbursal of funds. An implementation agency was involved in over half (53.3 per cent) of the spends. This included where spending happened only through an implementation agency alone and where it was done in partnership with the company. Companies spent only 42.59 per cent of the money directly (see chart 4 below).  This may also be because of the lack of institutional preparedness at many companies. The PRIME data also showed that almost half of the listed companies did not have a CSR committee as required by regulations.

Interestingly, the relatively well-off states seemed to attract a lot of the spends.  Maharashtra, Gujarat, and Delhi dominated in terms of money received. States like Bihar remained out of the top 10 list (see chart 5 below).