CSR Expenditure in India Hits 26278 Cr: Over 60% Allocated to Health, Education, and Environment in 2021-22

In 2021-22, a total of 26278.73 crores has been spent in India under various CSR activities, which is the highest in the last 8 years (since 2014-15). According to data available on the Ministry of Corporate Affairs (MCA) website, India has witnessed the highest donation from corporates for various social activities, with a marginal increase from the previous year 2020-21 (a total of 26210.96 crores spent in 2020-21). 

In FY22, India's Corporate Social Responsibility (CSR) spending on environment and sustainability more than doubled to ₹2,392 crore, which made the sector the biggest recipient of such funds after health and education. Spending on health in FY22 stood at ₹7731 crore, followed by education at ₹6482 crore as the top sector for CSR expenditure.

Why Do Companies Spend Crores on CSR Activities? 

Corporate Social Responsibility (CSR) is important for several reasons. First, it helps companies build trust and credibility with their stakeholders. By demonstrating a commitment to social and environmental issues, companies can enhance their reputation and create a positive image in the eyes of customers, investors, and the wider community. This can lead to increased sales, improved brand recognition, and a more engaged and motivated workforce.

Second, CSR is an important tool for managing risk. By identifying and addressing social and environmental issues, companies can reduce their exposure to reputational, legal, and financial risks.

How Much Companies Spend on CSR Activities?

Ever since the nature of Corporate Social Responsibility (CSR) was changed from voluntary to mandatory under the Companies Act 2013, the government has been closely taking note of the actual spend by corporates on their CSR activities. The companies are also required to focus on some specific activities towards social upliftment and community welfare programmes that are aligned to the United Nation’s Sustainable Development Goals (UNSDG).

This CSR provision has led the majority of Indian corporates to have an organised CSR approach so that their CSR budget planning and CSR spending are in compliance with CSR policies drawn by the Ministry of Corporate Affairs. Accordingly, the Business Responsibility Report (BRR) of companies also essentially carries a separate section on their CSR activities.

Companies that fall under one of the following three criteria are required to spend on CSR. Such companies are required to do CSR, which amounts to 2% of their average annual profit over the last three years. Here are the criteria for CSR eligibility for the companies.

1. Net worth of the company to be Rs 500 crore or more; or
2. Turnover of the company to be Rs 1000 crore or more; or
3. Net profit of the company is to be Rs 5 crore or more

Sectors with CSR Spending Above 1000 Crores: Healthcare, Education, Environmental Sustainability, and Poverty Eradication

The allocation of funds across four major development sectors over a period from 2014-15 to 2021-22 in India is denominated in INR crores. The sectors include Healthcare, Education, Environmental Sustainability, and Poverty Eradication along with Hunger and Malnutrition.

A noticeable trend is the significant increase in healthcare spending, growing from INR 1,847.74 crore in 2014-15 to INR 7,731.58 crore in 2021-22, reflecting a response to public health challenges, including those posed by the COVID-19 pandemic. Education sector funding saw fluctuations, peaking in 2019-20 with INR 7,179.51 crore before declining slightly in the subsequent years. The Environmental Sustainability sector experienced a notable jump in 2021-22 to INR 2,392.32 crore, more than double the previous year, indicating an increased focus on environmental concerns. Funding towards combating Poverty, Eradicating Hunger, and Malnutrition shows an uneven trend but significantly increased in 2021-22 to INR 1,885.01 crore, suggesting a reinforced commitment to these issues. Overall, the data reflects a growing dedication to these key development sectors, with substantial yearly investments to tackle some of the country's most pressing challenges.

CSR Spend in the Top Social Development Sector in the Last 8 Years: The amount spent is in INR Crores

Data Source: www.csr.gov.in 

Sectors with CSR Spending Between 100 and 1000 Crores: 

The provided data showcases funding allocations across various development sectors from 2014-15 to 2021-22, indicating the Indian government's priorities and responses to societal needs. 

1. Livelihood Enhancement Projects witnessed a peak in funding during 2019-20 (INR 1,077.72 Cr) before experiencing a decline, suggesting a focus shift or project completion.
2. Other Central Government Funds show a significant spike in 2020-21 (INR 1,618.17 Cr), possibly reflecting emergency or additional allocations due to extraordinary circumstances like the COVID-19 pandemic.
3. Sanitation sees a substantial investment, peaking in 2015-16 (INR 631.8 Cr), indicative of an emphasis on improving public health infrastructure, though allocations slightly decreased thereafter.
4. Training to Promote Sports has witnessed gradually increased funding, underscoring a growing emphasis on sports and athletics, perhaps aiming to enhance international competitiveness.
5. Conservation of Natural Resources and Safe Drinking Water displays an increasing trend in allocations, highlighting an ongoing commitment to environmental sustainability and public health.
6. Women Empowerment initiatives received consistent support, with a slight decrease in 2021-22, suggesting a steady commitment to gender equality.
7. Art, Culture, and Special Education sectors show fluctuating funding levels, reflecting changing policy focuses or project-based funding.
8. Animal Welfare and Socio-Economic Inequalities: Allocations indicate a nuanced approach to a broad range of societal issues, with varying levels of emphasis over the years.
9. Setting Up Homes and Hostels for Women: Saw a significant increase in funding in 2021-22 (INR 100.71 Cr), pointing towards a heightened focus on women's safety and empowerment.

Overall, these trends reveal a dynamic approach to developmental funding, with shifts in focus reflecting evolving societal needs, government priorities, and possibly the impact of global and domestic challenges.

CSR Spends in India in Other Social Development Sectors in the Last 8 Years: The amount spent is in INR Crores 

Data Source: www.csr.gov.in 

Sectors With CSR Spending Below 100 Crores: 

The provided dataset outlines financial allocations across various developmental sectors from 2014-15 to 2021-22, revealing targeted initiatives by the Indian government. The analysis highlights:

1. Gender Equality: Funding surged to INR 97.86 crore in 2021-22, showcasing a strong commitment to addressing gender disparities, with a notable fluctuation in previous years.
2. Senior Citizens Welfare: Steadily increasing investment, reaching INR 77.74 crore in 2021-22, reflects an enhanced focus on the welfare of the elderly, recognizing their growing needs.
3. Slum Area Development: Investment experienced variations, with a decrease to INR 58.14 crore in 2021-22 from its peak, indicating shifting priorities or the completion of specific projects.
4. Clean Ganga Fund: Demonstrates an incremental increase in 2021-22 to INR 55.31 crore, emphasizing ongoing efforts for river conservation amid fluctuating investments.
5. Support for Armed Forces and Dependents: The sector witnessed varied funding, with a notable decrease in 2021-22, suggesting the conclusion of certain programs or redistribution of resources.
6. Swachh Bharat Kosh: Exhibited significant fluctuations, with a marked decrease in 2021-22, possibly indicating a realignment of sanitation objectives following the completion of major initiatives.
7. Agro Forestry: Showcases a relatively stable commitment, with minor adjustments in allocations, underscoring sustained support for sustainable agricultural and forestry practices.
8. Orphanage Support: The sector saw gradual increases in funding, highlighting continued efforts towards child welfare and social security.
9. Technology Incubators: Experienced a significant reduction in funding in 2021-22, possibly reflecting a strategic shift or the achievement of set objectives.

CSR Spends in India in Other Social Development Sectors in the Last 8 Years: The amount spent is in INR Crores 

Data Source: www.csr.gov.in