Economic Survey 2023-24: CSR Spending Reaches Rs. 1.53 Lakh Crore from 2014 to 2022 – 8 Years

Eight Years of Corporate Social Responsibility Investments Fuel Societal Growth

The distribution of CSR investment is currently skewed towards corporate hubs, leaving underdeveloped areas relatively less funded.

NEW DELHI (India CSR): The Economic Survey 2023-24 highlights a significant milestone in corporate India’s journey towards societal betterment. Over the eight years from 2014 to 2022, companies have collectively spent Rs. 1.53 lakh crore on Corporate Social Responsibility (CSR) initiatives. This substantial investment reflects a growing commitment to not only meeting regulatory requirements but also making a meaningful impact on various social sectors, paving the way for a more developed and inclusive India.

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The Economic Survey 2023-24 reveals a remarkable 53% increase in Corporate Social Responsibility (CSR) spending by Indian corporates. This shift from mere compliance to robust governance highlights the growing commitment of corporate India towards societal betterment. The enhanced contributions are a testament to the significant strides being made towards a developed India.

Annual CSR spending in India (in Rs. crore)

Transforming CSR: From Compliance to Governance

A New Era of CSR Spending

The substantial increase in CSR spending underscores the transition from regulatory compliance to a strategic governance model. This shift marks a pivotal moment for corporate India, showcasing a more profound commitment to addressing societal challenges. The focus is no longer just on meeting legal obligations but on making a tangible impact on the community.

Targeting Fundamental Sectors

Corporate contributions have predominantly been directed towards fundamental areas like Education and Healthcare. This focus is commendable as it addresses essential societal needs. However, it is equally important to expand CSR efforts to other critical sectors such as research, technology, and gender equality. Additionally, geographic locations like the North-Eastern states require more attention, where CSR spending remains disproportionately low.

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A Strategic Approach to Balanced Growth

Broadening the Scope of CSR

The broadening of CSR spend is crucial to ensure balanced and inclusive growth across the country. While the enhanced contributions are a positive development, a strategic and equitable approach is needed. This approach will lead the impact of these investments towards a truly developed India, fostering growth in underfunded sectors and regions.

Wholesome Welfare and Inclusive Development

The approach to welfare is increasingly wholesome and inclusive, with the private sector playing a significant role through CSR. Since 2014, when CSR spending by companies was made mandatory under Section 135 of the Companies Act 2013, the trend of CSR spending has shown robust growth. With the economy’s growth, corporate profits in India have surged, thereby increasing the mandatory CSR pool, which is expected to continue powering sustainable and inclusive development.

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Corporate Social Responsibility: Bridging Profit and Purpose

Trends in CSR Activities

According to data from the Ministry of Corporate Affairs (MCA), the eight years from 2014 to 2022 saw Rs. 1.53 lakh crore spent on CSR. Notably, spending in the last three years constitutes more than 50% of the total CSR amount spent since 2014. This growing adherence to CSR compliance, with many companies exceeding their obligations, signifies a deeper integration of social responsibility within corporate strategies.

Legal Mandate and Its Impact

The legal mandate on CSR applies to companies with a net worth of Rs. 500 crore or more, an annual turnover of Rs. 1000 crore or more, or a net profit of Rs. 5 crore or more. These companies are required to spend 2% of their average net profit from the preceding three financial years on social impact programs. This mandate has played a pivotal role in ensuring that significant resources are directed towards societal betterment.

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Total CSR spent: Top five States, FY22

State-wise and Sector-wise CSR Spending

Top States Benefiting from CSR

State-wise data reveals that Maharashtra, Karnataka, Gujarat, Tamil Nadu, and Uttar Pradesh are the top five states in terms of CSR spending. In FY22, Maharashtra alone saw Rs. 5290 crore in CSR spending, followed by Karnataka with Rs. 1812 crore, Gujarat with Rs. 1585 crore, Tamil Nadu with Rs. 1407 crore, and Uttar Pradesh with Rs. 1331 crore. This distribution highlights the concentration of CSR efforts around corporate headquarters and developed regions.

Sector-wise Distribution of CSR Funds

Sector-wise, more than three-fourths of the total CSR spend is concentrated in four development sectors: Education (32.4%), Healthcare & Sanitation (38.4%), Rural Development (6.9%), and Environment, Animal Welfare & Conservation (10.9%). This focus aligns with the critical needs of society but also underscores the need for diversification into other impactful areas.

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Enhancing Non-Profit Partnerships and Regional Balance

Collaborations with Non-Profits

About half of CSR funds are implemented in partnership with non-profit organizations. This model has significantly boosted the non-profit ecosystem, enabling cross-pollination of ideas across sectors. Corporates gain from the community engagement and inclusive outlook provided by non-profits, while non-profits benefit from the analytical and process-based rigor of their corporate partners.

Addressing Regional Disparities

The distribution of CSR investment is currently skewed towards corporate hubs, leaving underdeveloped areas relatively less funded. To achieve regionally balanced CSR spending, there is a pressing need for enhanced investment in the organizational growth and capacity building of non-profits working in these underdeveloped areas. This strategic approach will ensure that CSR efforts contribute to inclusive growth across all regions of the country.

(India CSR)