During the Covid-19 pandemic, despite many companies facing financial challenges, the overall expenditure on Corporate Social Responsibility (CSR) initiatives in India increased. This rise was significantly influenced by large corporations such as Reliance Industries Ltd (RIL), HDFC Bank, and Tata Consultancy Services (TCS), which remained financially resilient through the pandemic.
A Businessline analysis of data from the National CSR Data Portal revealed a decline in the number of companies engaging in CSR activities from 2019-20 to 2021-22. The peak was in 2018-19 with 25,181 companies participating, which dropped to 20,840 and 18,623 in the subsequent years. Despite this decrease, the total CSR expenditure grew from ₹20,217 crore in 2018-19 to ₹25,932 crore in 2021-22. Notably, the proportion of companies spending more on CSR than the prescribed limit increased to 56.08% in 2021-22 from 22.97% in 2017-18.
Under Section 135 of the Companies Act, 2013, companies with a certain net worth, turnover, or net profit are required to allocate at least 2% of their average net profits from the preceding three financial years towards CSR activities.
Maya Vengurlekar, Chief Operating Officer of CRISIL Foundation, attributed the reduction in companies participating in CSR activities to decreased profitability and economic uncertainty caused by the pandemic. However, she also noted an increased display of corporate altruism during this period.
While about one-fifth of companies did not report their CSR spending on the National CSR Data Portal, the number of companies with zero CSR spending dropped significantly. Approximately 54% of companies reported zero spending in 2017-18 and 2018-19, which decreased to 28.25% and 21.10% in 2020-21 and 2021-22, respectively.
Chandrakant Rao, a Chartered Accountant based in Mangaluru, highlighted that corporate leaders recognize the importance of environmental, social, and governance (ESG) best practices for long-term sustainability and growth, beyond just profit.
During these years, only six companies, including RIL, TCS, Oil And Natural Gas Corporation Ltd, Tata Sons Pvt Ltd, HDFC Bank Ltd, and Indian Oil Corporation Ltd, have spent more than ₹500 crore on CSR. RIL, in particular, reported the highest CSR spending of ₹1,271 crore during 2022-23 and has consistently been a top contributor in India.
The report also noted that ten major corporates contributed nearly one-fifth of the total CSR spending in India from 2017-18 to 2021-22. Additionally, the proportion of companies spending up to ₹50 lakh on CSR initiatives, which was above 84% in pre-Covid years, fell below 79% in the post-Covid era.
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