CSR spend rose 9 pc to Rs 8,897 cr in FY17: Report
The Annual CSR Tracker compiled by CII revealed that the number of BSE-listed companies required to fulfil the mandate has also increased to 1,522 in FY17 from 1,270 in FY16 and 1,181 in FY15. Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least 2 per cent of their three-year annual average net profit towards corporate social responsibility (CSR) activities
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Over 530 companies may face action for CSR norm violationsA total of 1,522 BSE-listed companies spent Rs 8,897 crore, or 92 per cent of the budgeted Rs 9,680 crore on corporate social responsibility activities in 2016-17, an increase of about 9 per cent from the previous year, according to a report. The Annual CSR Tracker compiled by CII revealed that the number of BSE-listed companies required to fulfil the mandate has also increased to 1,522 in FY17 from 1,270 in FY16 and 1,181 in FY15. Under the Companies Act, 2013, certain class of profitable entities are required to shell out at least 2 per cent of their three-year annual average net profit towards corporate social responsibility (CSR) activities.
The survey suggests a substantial increase in CSR spends as against FY16 in the areas of environment and ecology (66 per cent), gender equality (115 per cent), national heritage (153 per cent) and sports development (192 per cent). However, there was no CSR spend in the areas of technology incubation or slum development by a single public sector enterprise (PSE) in FY17. Moreover, slum development did not receive any funds from state-owned enterprises in the previous year either. The overall increase in CSR spends in FY17 as compared to the previous year is 8.70 per cent. Development areas that show maximum increase in the CSR spends as against FY16 are sports development, national heritage, gender equality and environment.
There was a noteworthy increase in the CSR spend with respect to armed forces veterans in FY17 amounting to Rs 33 crore in comparison to FY16, where less than Rs 1 crore was spent, according to the report. However, 2016-17 registered a huge drop in the contribution made to the PM's Relief Fund as compared to the previous fiscal where 79 companies contributed Rs 80.55 crore while 120 companies contributed to Rs 107.43 crore in 2015. This year, only 45 companies reported to have invested about Rs 23 crore. This is a positive indication towards the effort made by companies to introspect their nature of spends and comply with the CSR legislation, the report said regarding the decline in contribution made to the PM's Relief Fund.
"Alignment of business strategy is slowly but surely happening. Companies have begun to disclose impact data, which goes beyond the requirements of the legislation. This is an indicator of improved transparency though quality of data leaves much to be desired," CII Director General Chandrajit Banerjee said. Across all three years FY15-17, the industrialised states of Maharashtra, Gujarat and Tamil Nadu remained favoured destinations for CSR investment. It appears that over a span of three years, about 40 per cent of the companies preferred investing in one state/UT and about 4 per cent in more than 10 states/UTs. Moreover, Northeast India received investment from 35 per cent of the PSEs and 65 per cent of the non-PSEs.
Out of the 32 industry categories, the major contributors to CSR spends in all three financial years are oil and gas; software and services; utilities; and metals and mining. Big increases in CSR spends in FY17 in comparison to FY15 are reported in automobiles and auto components, construction materials, consumer durables, coal and other financial services, the report said.
