India Inc needs more time to spend meaningfully

Indian corporates are just settling in to the regime of mandatory spends on CSR activities. The Centre has so far been lenient and has allowed them to spend less than the required amount as long as they disclose the reason. Many companies, which have fallen short, have listed a variety of reasons for this short-fall.

This varies from the need for more time to identifying the right CSR activity to longer implementation period for certain projects.

Idea Cellular, that has not spent on CSR in 2014-15, has stated that being a preparatory year for the implementation of CSR policy, the company was in the process of evaluating the various focus areas. It has identified some key projects, which will be executed during the current fiscal year 2015-16.

Hero MotoCorp too, which spent only about five per cent of its mandated amount, expects to see a huge spend on CSR in the current fiscal, after spending the last fiscal in drafting a robust plan. HCL Technologies, that also spent less than one-tenth of its requirement, stated that it has identified areas. These projects currently at their initial stages will gain momentum and scale up.

Most of the other weak spenders have highlighted that they are building their CSR capabilities and are committed to gradually increasing its CSR spend in the coming years.

Some companies have gone into more details on why they were unable to spend the required amount. GAIL, for instance, stated that almost in all CSR projects, payments are linked to achievement of milestones, and hence, the actual expenditure against them has spilt beyond the fiscal year — Swachh Bharat Swachh Vidyalaya being one of them. BPCL too, has cited delay in some of its projects such as water conservation, Swachh Bharat Swachh Vidyalaya and education, as the main reason for the under-spending. NTPC, another public sector undertaking that had to rework its CSR plans to include Swachh Bharat Swachh Vidyalaya Abhiyan, will also be making substantial expenditure towards this activity.

Housing finance company HDFC, on the other hand, wanted to conduct a major part of its CSR activities through the HT Parekh Foundation, which received Foreign Contribution Regulation Act, 2010, approval only in March 2014. Time taken to evaluate projects led to the shortfall in CSR spending.

Where they spent Top spenders, who more than met their mandated CSR amount, have spent money across healthcare, education, environment and Swachh Bharat initiatives.

Reliance Industries has spent a major portion on healthcare and rural transformation through the Reliance Foundation — the umbrella organisation for its social sector initiatives. ITC, one of the biggest spenders, has mainly concentrated on health and sanitation, drinking water, education and environment. Tata Steel has primarily spent monies on health and drinking water, education and livelihood.

While HUL spent money on water conservation projects, drinking water, livelihood programmes and environment, Wipro spent a chunk on higher education in engineering and technology linked to skills development for the IT industry.

While most companies focused on the usual — education, health, environment and sanitation, there were some that spent on some interesting initiatives such as sports, art and culture too. ITC, for instance, spent a substantial portion on protection of national heritage, art and culture, including restoration of buildings and sites of historical importance and works of art in West Bengal and Punjab.

Tata Steel also spent on the protection and restoration of national heritage and sports in Jharkhand and Odisha.

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