When GDP Magazine compared CSR spending data of FY16 with FY15, an interesting picture has emerged. Out of top 1000 spender companies of FY16, just 416 companies were present in the FY15 list, clearly showing reluctance of company management to share database of CSR spending and filing company’s return till the deadline of 31 December 2016, which is just 42% for top 1000 companies. Also among these 416 companies, CSR spending increased during FY16 viz a viz FY15 as these 416 companies spent Rs. 8369 crore during FY16, while they spent Rs. 6078 crore during FY15, an increase of Rs. 2291 crore or 37.7%. Data shows that CSR spent by big private companies is on declining mode, while PSUs seem more responsible and it is because of PSUs, CSR spent has gone up during FY16. As far as top 10 spenders for FY16 are concerned, there are 5 PSUs in the top 10 list, Reports Aruna Sharma in Governance Democracy&Politics (GDP), Special Issue on CSR “Responsible Institutions of India 2016”
Though Corporate Social Responsibility or CSR remains to be the buzzword for corporate India for quite some time now and there is a kind of mad rush among companies to show them to be socially more responsible. Interestingly, companies are even going all out to advertise heavily that they are much more responsible towards society. But if we look at the real performance of companies towards CSR spending, this whole exercise seems to be just eyewash by the companies. Companies are quite reluctant to spend on CSR, despite being made compulsory under Company’s Act 2013.
There is no denying the fact that Ministry of Corporate Affairs (MCA) is doing commendable work in compiling data regarding CSR and ministry has now come out with data of 5097 companies for FY16 for CSR spending. What is encouraging is that CSR Spending has gone up from Rs. 8803 crore (from 7334 companies) in FY15 to Rs. 9822 crore (from 5097 companies) during FY16. “The trend is quite encouraging as companies are now getting sense of it and coming out themselves to spend on CSR and also filing the data regarding that too. We have sensitized companies through different platforms that they must file data regarding CSR in XBRL format, which is easy as well as more data analysis friendly,” marks high placed official of MCA. At the same time response of Private companies and MNCs is still quite lukewarm towards CSR.
Another interesting fact remained that right now there is no authority with MCA to penalize those company, who doesn’t spend on mandatory CSR. “Even if some company doesn’t full fill the mandatory requirement or spend less then ministry doesn’t have any power to take any action but its ROC route that we have to take,” informs official. “Also even if any company decides not to spend on mandatory CSR then provision of law is such that company can easily skip any penalty, as company board has to decide upon CSR spending and they can give some justification for no spending on CSR,” adds the MCA official. Considering this it is only conscience that prevails as far as CSR Spending is concerned and companies have to inculcate their own voluntary urge of being responsible towards that society. Unfortunately private companies and MNCs are perhaps well versed with this provision and are vehemently skipping the mandatory provision of CSR.
By looking at the data compiled by MCA for FY15 too (First of it’s kind after CSR spending made compulsory for companies), it clearly corroborates that majority of companies just want to complete formality, as far as CSR spending is concerned. India Inc’s commitment towards corporate social responsibility remains shaky, as companies give flimsy excuses for not meeting their legally mandated obligations.
This article is part of Special Issue of GDP Magazine on CSR. Governance Democracy& Politics (GDP) Magazine’s Special Issue on #CSR Takes A Deep Dive on the state of CSR Spending. It has a regressive database of 5000+ companies on CSR Spending.
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