Companies shelling out Rs 9 lakh to Rs 25 crore for CSR per year: Survey
(The study conducted by global…)
NEW DELHI: With social welfare spending becoming mandatory for India Inc, companies are projected to shell out money ranging from Rs 9 lakh to Rs 25 crore per annum, says a study.
The study conducted by global consultancy Mercer found that corporates are most likely looking to spend on education and community-based development activities, among others.
Provisions under the new companies law mandate certain class of profitable companies to spend at least 2 per cent of their three-year annual average net profit towards Corporate Social Responsibility (CSR). The norms came into effect from April 1, this year.
"Across industries and company sizes, budgets were varied, ranging from Rs 900,000 to Rs 25 crore per annum," Mercer said.
Of those allocating a funds for CSR, most were from the financial services industry with an annual budget of an average Rs 4.5 crore.
The highest budget (Rs 25 crore) was seen at a large IT company, Mercer said.
As per the survey, about 81 per cent identified education as the core area around which most of the current CSR activities in India are based on.
These are followed by community-based development (64 per cent) and environmental sustainability within the company (61 per cent).
The findings are based on survey of 40 organisations across the country as well as sectors.
"The importance of CSR/sustainability is seeping deep into Indian companies as 3 out of 4 firms in India already have or are planning to form a core team dedicated to CSR/sustainability within the next 1-2 years," Mercer India Business Leader, Information Solutions Shanthi Naresh said.
"With dedicated teams in place and companies stating that employee volunteering will be involved in their corporate citizenship projects, India is surely striding in the right direction down the sustainability path," Naresh added.
According to the survey, 81 per cent of the respondents felt that the policy was an extremely important component for business strategy.
Findings showed that the most commonly seen policy age was three to four years.
"This demographic was predominately comprised of listed Indian organisations in the private sector and multinational organisations headquartered outside of India," Mercer said.
Interestingly, a global comparison revealed that nearly 44 per cent of Indian firms had a dedicated team responsible for CSR compared to one-quarter firms in other countries.
However, only about one-third of Indian firms said they issue an integrated annual report on CSR as against half of the companies in other parts of the world.
The majority (78 per cent) of the firms conducted CSR by partnering with a local, independent non-profit organisation.Companies shelling out Rs 9 lakh to Rs 25 crore for CSR per year: Survey
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