The unspent CSR funds stood at a five-year high of Rs. 1475 crore during the financial year ending on 31st March 2023. According to the National CSR Portal, a lot of listed companies above a threshold have failed in spending the required amount of funds on Corporate Social Responsibility (CSR).
Amount Spent
In total, the listed companies in the country spent Rs 15,602 crore on CSR initiatives during FY23. However, they were required to spend Rs 15,787 crore, according to data from corporate tracker primeinfobase.com. While the difference in spending required vs actual amount spent is Rs 185 crore, some of the companies exceeded their mandatory csr spending, thus covering up for the lack of prescribed spending by other companies.
The aggregate amount unspent in stood at Rs 1,475 crore by those companies that incurred less than the mandated sum on CSR, as per the data in their annual reports.
Mandatory CSR
In India, according to the Company’s Act, the companies that meet the criteria on the basis of net profit, turnover, and net worth are required to incur at least two per cent of their average net profits during the immediately preceding three financial years on CSR activities such as initiatives on environment, health, skill development, drinking water, and sanitation.
This covers all companies listed on the NSE and those exclusively listed on BSE with a market capitalisation exceeding Rs 1,000 crore.
The Deficit
The listed companies in India allocated Rs 99 for every Rs 100 mandated for CSR projects. This marks the lowest ratio in the past five years. In FY2020, these companies spent Rs 111 for every Rs 100 required.
On average, each company spent Rs 11.29 crore on CSR in FY23, a four per cent decrease from FY22 and a nine per cent decrease from FY21. Listed companies, on aggregate, spent 1.91 per cent of their net profits on CSR, less than the prescribed requirement.
According to the National CSR Portal under the Ministry of Corporate Affairs, the number of defaulting companies whose expenditure has been less than the prescribed amount is 4,855, one-fifth of the total companies.
