The commitment of Indian conglomerates to Corporate Social Responsibility (CSR) has seen a 53 per cent increase between financial years 2017-18 and 2021-22, according to the Economic Survey. The substantial and consistent growth in CSR spending sheds light on the hoslitic approach towards social development at the hand of both – government and private sector.
Corporate Social Responsibility has been mandatory for Indian companies as per the Companies Act 2013. The Economic Survey tabled by the government on July 22, 2024 has highlighted that CSR spending was ₹17,096 crore in 2017-18, rose to ₹20,217 crore in 2018-19, and reached ₹26,278 crore in 2021-22.
The survey has revealed that sector-wise, over three-fourths of the total CSR expenditure is concentrated in four key development areas: Education (32.4%), Healthcare & Sanitation (38.4%), Rural Development (6.9%), and Environment, Animal Welfare & Conservation (10.9%). This focus underscores the prioritisation of critical sectors that directly impact the quality of life and sustainability.
With the continued growth of the Indian economy and resultant spike in profits, the pool of mandatory CSR funds is expected to grow even further, fueling sustainable and inclusive development driven by non-profit organisations.
Exceeded Mandatory Obligations
From 2014 to 2022, Indian companies have spent a total of ₹1.53 lakh crore on CSR activities. Remarkably, more than half of this amount has been spent in the last three years alone, demonstrating a growing commitment to CSR compliance by India Inc.
Many companies have not only met their CSR obligations but have also exceeded them. For the past three years, annual CSR spending has consistently exceeded ₹25,000 crore, marking a 1.5-fold increase over eight years. According to the Economic Survey, public sector units, although comprising just 2% of the companies mandated to perform CSR, contribute nearly 17% of the total CSR spending, highlighting the significant role that public enterprises play in driving social welfare initiatives.
The implementation of CSR projects frequently involves partnerships with non-profit organisations, accounting for about half of the CSR funds. This collaborative model enhances the non-profit ecosystem, facilitating a cross-pollination of ideas and practices.
Companies benefit from the community engagement and inclusive perspectives brought by non-profits, while the latter gain from the analytical and process-oriented rigour of their corporate partners.
Despite the overall increase in CSR spending, the distribution of funds remains concentrated around corporate headquarters, leaving underdeveloped regions relatively underserved.
To achieve regionally balanced CSR investments, there is a pressing need to strengthen the organisational growth and capacity building of non-profits operating in these underdeveloped areas.
