83% Of Corporate Houses Anticipate To Increase CSR Spending: FICCI

Most corporates see increase in spend for CSR activities in the next fiscal as per by industry body FICCI (Federation of Indian Chambers of Commerce and Industry).

Latest survey done by FICCI on strategic decision-making process by Indian companies in terms of their CSR activities shows 83% of the respondents anticipating to increase in their CSR spend for the year 2016-17. While 6% participants expected a decline, another 9% no change.

The remaining 2% of the companies said that they have made a CSR allocation in their budget for the first time it noted. Lack of clarity in laws and tax, delay in getting permission from competent authority, conflicts among local stakeholders, etc. were few of the issues pointed out by the participants during implementation of CSR activities. 77% of the companies that were surveyed have increased their CSR spending in the year 2014-15 vis-à-Vis 2013-14, only 12% of the companies said their CSR spending declined another 6% cited no change.

Promotion of education, special education and vocational skills and poverty, hunger, health care, sanitation received the maximum focus when it came to CSR spending. Contribution towards technology incubators provided by Central government and slum development received the least focus.

“It is encouraging to note that companies have continued to base their CSR programmes according to community needs aligning with the national development agenda, especially those impacting women and children,” said Rajashree Birla, Chairperson, FICCI – Aditya Birla CSR Centre for Excellence. Under the Companies Act, 2013, certain class of profitable entities is required to shell out at least 2 per cent of their three-year average annual net profit towards CSR activities.

The norm came into effect from April 2014. According to the Clause 135 of the Companies Act 2013, a company is expected to appoint a CSR Committee of three or more directors, with at least one independent director on board. A majority 79% of the companies participating in the survey indicated that they have an independent director on board.

A little less than half (49%) of the respondents said that they have one independent director, while another 26% cited having two independent directors. Further on the constitution of the CSR Committee, about 74% respondents reported having the CEO as a part of the committee.

Moreover, a significant 95% of the respondents reported that their CSR projects are aligned with the Government’s development initiatives and the Top 3 initiatives that the companies have aligned their activities to include – Swachh Bharat Mission, Skill India and National Health Mission. The findings are based on a survey that was conducted between January and February 2016 for around 150 companies from various sectors like Manufacturing, Textiles, FMCG, Infrastructure, etc participated in the survey.