An Analysis of CSR and its Expenditure in India in the Terms of Trends, Impact and Challenges

Abstract

The United Nations Industrial Development Organisation (UNIDO) has defined corporate social responsibility (CSR) as "a management concept whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders. CSR is a way in which companies achieve a balance of economic, environmental and social imperatives". Corporate Social Responsibility (CSR) has emerged as a crucial aspect of business operations worldwide, with companies recognizing their responsibility to contribute positively to society. In India, the CSR landscape has witnessed significant growth and transformation since the introduction of the Companies Act, 2013, mandating qualifying companies to allocate a portion of their profits towards CSR activities. This research paper delves into the CSR expenditure in India, aiming to analyze the trends, impact, and challenges faced by corporations in fulfilling their CSR commitments. The study employs both qualitative and quantitative research methods, including data analysis, case studies, and interviews with key stakeholders to gain comprehensive insights into the subject matter. The paper sheds light on the effectiveness of CSR initiatives and provides valuable recommendations for enhancing CSR practices in India. Since the enactment of CSR provisions in April 2014, companies have spent nearly 1.27 trillion rupees or 1.27 lakh crore rupees in a span of seven years as per the data available on the National CSR Portal based on the disclosures made by companies. This money has been spent across 29 different sectors such as health, education, environment, welfare, development, and others. From over Rs. 10,065 crores spent in 2014-15, the CSR expenditure in India has increased to Rs. 25,715 crores in 2020-21 registering a 2.5-times increase in the seven years of implementation. With nearly Rs. 36,815 crores, the education sector received 29% of the CSR expenditure between 2014-15 and 2020-21. The health sector comes next with 20% of the CSR expenditure of Rs. 25,391 crores. More than Rs. 12,300 crores were spent in Rural development projects which accounted for 9.7%. The three sectors are the only ones to receive more than Rs. 10,000 crores each of CSR expenditure and together accounted for nearly 59% of the total CSR expenditure incurred in the country in seven years. Environmental sustainability, malnutrition, hunger and poverty, livelihood enhancement projects, central government funds including PMNRF, sanitation, art & culture, and vocational skills received more than Rs. 2000 crores each and together contributed to another 29.4% of the expenditure. Safe drinking water, women empowerment, natural resources conservation, gender equality, animal welfare, orphanages, armed forces (veterans, war widows, etc.), special education, SwachchBharathKosh, sports, technology incubators, senior citizens welfare, agroforestry, slum area development, and socio-economic inequalities are the other sectors in which CSR amount is used. These sectors accounted for <9% of the CSR expenditure. For the remaining expenditure (~3%), companies have not disclosed the details of the projects.