According to primeinfobase.com, spending on Corporate Social Responsibility (CSR) by NSE main board businesses climbed by 5% in fiscal year 2022-23 (FY23) to Rs 15,524 crore, up from Rs 14,816 crore in FY22. This followed a 13% increase in these companies' average net profit (during the previous three years), with 2% of that required to be spent on CSR activities under regulatory regulations.
CSR activities might include charitable donations, community service, environmental stewardship, and support for social issues such as education or healthcare. Businesses must recognise their role in making the world a better place and take steps to create good changes.
According to Pranav Haldea, Managing Director of PRIME Database Group, while the growth in revenues increased the amount required to be spent, these companies as a whole had already been spending more than the required amount in the preceding three years (from 2019-20 to 2021-22). Thus, the increase in spending in 2022-23 was less significant.
The CSR law, which went into effect in April 2014, requires corporations to invest 2% of their net earnings in CSR programs. Companies with a net worth of Rs 500 crore or more, revenue of Rs 1,000 crore or more, or net profit of Rs 5 crore or more are required to spend 2% of their average net profits over the previous three years.
According to Haldea, it is also time for the government to consider raising these barriers in light of the passage of time and the "ease of doing business". The average three-year net profit of NSE-listed companies has nearly doubled, rising from Rs 4.18 lakh crore in 2014-15, the first year of the regulation, to Rs 8.14 lakh crore in 2022–23.
And accordingly, the thresholds may now be raised to keep comparatively smaller enterprises out of the scope of this rule, which was also the original aim.
According to primeinfobase.com, there were 1,893 businesses listed on the NSE main board as of March 31, 2023. Of the 1,893 firms, 1,854 have released annual reports for 2022-23. Of these 1,854 companies, 1,830 included information about CSR in their annual reports, while the remaining 24 did not. Finally, of the 1,830 enterprises, 1,296 were required to spend on CSR, up from 1,214 in 2021-22.
The number of companies that spend on CSR increased to 1271 (98% of the 1296 enterprises) in 2022-23 from 1191 (98%) in 2021-22. The remaining 25 firms, despite being compelled, did not spend anything. HDFC Bank (Rs 820.89 crore), TCS (Rs 783 crore), Reliance Industries (Rs 744 crore), Tata Steel (Rs 480.62 crore), ONGC (Rs 475.89 crore), ICICI Bank (Rs 462.66 crore), Infosys (Rs 391.51 crore), ITC (Rs 365.50 crore), Power Grid (Rs 321.66 crore), and NTPC (Rs 315.32 crore) are the top ten companies in terms of CSR spending in FY 2022-23. These corporations accounted for 33% of overall CSR spending in FY23.
The study also revealed that 48 companies, despite reporting an average loss over the previous three years, spent on CSR. The list includes Tata Motors, IDFC First Bank, MRPL, CPCL, BHEL, Jaiprakash Ventures, Aditya Birla Fashion & Retail, MSP Steel & Power, Star Health & Allied Insurance, and Patel Engineering.
PSU spending on CSR activities fell by 17% from the previous year. In 2022-23, 56 PSUs spent Rs 3,136 crore, a decrease from Rs 3,766 crore spent by 59 PSUs in the previous year.
Maharashtra (Rs 355.78 crore), Rajasthan (Rs 344.19 crore), Gujarat (Rs 193.39 crore), Tamil Nadu (Rs 185.68 crore), Chhattisgarh (Rs 167.83 crore), Uttar Pradesh (Rs 156.82 crore), Haryana (Rs 154.10 crore), Telangana (Rs 147.63 crore), Odisha (Rs 140.08 crore), and Karnataka (Rs 123.91 crore) are the top states in terms of CSR spending.
