Page 3 - CRISP-Newsletter-Feb-2024

www.crispindia.net

What has been achieved in the past ten years? development. Many communities have directly benefited
from CSR and a huge bank of experience and learning
There have been numerous notable achievements. is now available for implementing some of the success
stories at scale.
1. CSR as a statutory concept is unique, when What were the shortcomings?
compared to most countries in the world.
Participants (at the CSR Conference in Mumbai) In the ten years, some limitations and shortcomings of
from many developed countries expressed the CSR were also noticed. Any new experiment has its share
view that their laws governing companies do of successes and failures. The purpose of examining the
not have such a provision. Most of them felt shortcomings is to draw lessons and improve things for
that this is a progressive legislation that enables the future.
the companies to think beyond profits and
encourage them to look at the commitment to 1. Firstly, CSR spending has largely been localised in the
their communities in a more focused manner. In areas where the companies have their establishments.
that sense, Indian laws stand out globally. As a result, more developed states were the largest
2. Large sums of additional money became available beneficiaries of CSR spending. For instance, almost
for social sector activities. According to the data one third of the total CSR amount (₹52,000 crores)
available on the National CSR Portal, an estimated was spent in Maharashtra alone. While it is a matter
₹150,000 crore was earmarked nationally by the of satisfaction for me as an ex-bureaucrat of the
companies for CSR in the seven years since the state, seen from the national perspective this would
concept became operational. Of this amount, be a matter of concern. Ideally, CSR spending should
Maharashtra got nearly ₹52,000 crores in these be more evenly distributed across the country. Some
ten years (more about it later). policy interventions are necessary.
3. Many companies have experimented with 2. The second limitation, which is corollary of the first
different approaches to better deliver better point is that there is hardly any CSR funding being
results for the communities that they cater. These directed towards the North East Areas as also our island
different approaches provide useful experience territories, like the Andamans and Lakshadweep. Their
and learning, particularly if the government was unique problems could be addressed by the companies
to decide on scaling up any of these interventions through innovative programs.
to the state or national level. 3. Thirdly, some company representatives pointed out
4. The encouraging performance of the Public Sector (during the informal discussions at the conference)
Undertakings (PSUs). Central PSUs collectively that as per current regulations, it is not possible for
spend almost ₹4000 crores every year. Even two or more companies to undertake and joint or
though the bulk of this amount goes into areas syndicated efforts towards CSR. Many successful
of their operations, almost 250 PSUs have come CSR projects can be conceived and implemented in
forward to spend thematically on the Aspirational collaboration and syndication, which perhaps under
Districts Program of ‘Niti Aayog’, covering almost the current regulation is difficult.
100 backward districts. This is bound to have a 4. Fourth, some candid company representatives (at the
salutary effect on the development of these CSR conference) said that CSR becomes another form
districts. of taxation, and why was there a need for that when
5. During Covid-19 pandemic, the PM CARES Fund the companies already pay huge sums as taxes to the
- PM’s Citizen Assistance & Relief in Emergency government. Moreover, they were apprehensive that
Situations Fund was established. Schedule VII in the course of time the government may increase the
of the Companies’ Act 2013 was amended to mandatory spending on CSR.
make donations from CSR to the said fund an 5. Finally, an issue came up about the CSR by the PSUs.
eligible expenditure under CSR. Due to this, over Being Government companies, they do encounter
a short span of time, much needed resources some inertia as compared to the private sector when
were mobilised to fight Covid. In a very short implementing CSR projects. In addition, there are
period after the amendment, the central PSUs murmurs about undue political influence, which make
contributed ₹4000 crores. This was helpful in CSR project implementation fraught with some risks
managing Covid-19 effectively. for the PSUs.
6. CSR funds have helped the companies to extend
a helping hand to the communities who may be It is therefore necessary to understand
displaced or adversely affected by their activities, these issues and take timely steps to make
or with whom they interact on a daily basis, improvements to gain maximum advantage of CSR.
being in the vicinity of their establishments.
Thus the experience of t he past ten years suggests
that the provision for CSR enacted in 2013 has had a
far reaching and beneficial impact on socio-economic

MAASAM | FEB | 3