Strengthening the CSR framework is a profitable idea
GS paper 2
Syllabus: Development process and the development industry-the role of NGOs, SHGs and various other groups and associations, donors, charities etc
Source: The Hind
Context: Since the establishment of the CSR regime in India under Section 135 of the Companies Act 2013, CSR spending in India has risen from ₹10,065 crores in 2014-15 to ₹24,865 crores in 2020-21.
CSR data for companies:
There is no data to verify whether the increase is commensurate with the increase in profits of Indian and foreign (having a registered arm in India) companies.
Zero spending: There were 2,926 companies in 2020-21 with zero spending on CSR.
Prescribed limit: Companies spending less than the prescribed limit of 2% rose from 3,078 in 2015-16 to 3,290 in 2020-21.
Participation: There was also a decline in the number of companies participating in CSR.
Private companies have registered their own foundations/trusts: To which they transfer the statutory CSR budgets for utilization.
It is unclear if this is allowed under the Companies Act/CSR rules.
Other issues:
Ashoka University’s Center for Social Impact and Philanthropy: It says that 54% of CSR companies are concentrated in Maharashtra, Tamil Nadu, Karnataka and Gujarat (receiving the largest CSR spending)
The populous Uttar Pradesh and Madhya Pradesh receive little.
Only 9% was spent on the environment compared to education(37%) and health and sanitation(29%).
The Standing Committee on Finance observed that the information regarding CSR spending by companies is insufficient and difficult to access.