Executive summary

In just seven years since it was made mandatory, spending on corporate social responsibility (CSR) in India has crossed the Rs 1 lakh crore milestone, with around 40% of this incurred in just the past two fiscals as companies rolled up their sleeves to fight the Covid-19 pandemic.

Our estimation, based on data disclosed in annual reports, pegs overall CSR spending in fiscal 2020 at Rs 21,231 crore, with 1,387 listed companies accounting for ~Rs 14,431 crore (~26% more than in fiscal 2019), and 19,962 unlisted ones Rs 6,800 crore (~7% less than in fiscal 2019).

In fiscal 2021, again, assuming the spending was around the mandated mark of 2% of average profit of the preceding three fiscals, eligible companies would have spent ~Rs 22,000 crore on CSR, including Rs 14,986 crore by more than 1,700 listed ones and ~Rs 7,072 crore by unlisted entities.

While the actual spending for the two fiscals can be corroborated only once annual reports for last fiscal become available and are analysed in coming months, one trend is clear: Covid-19 has gobbled up a chunk ofthe money.

We undertook two separate exercises to say this with certainty, based on data sourced from company websites, public disclosures and articles/ features on reliable websites, including those of top newspapers, business magazines and financial portals.

In the first exercise, we took the top 500 companies by CSR spending in fiscal 2020 and calculated their expenditure on Covid-19 relief since March 23, 2020, when it became eligible for CSR calculation¹. This showed them spending ~Rs 11,000 crore, as of June 2021.

For the second exercise, we considered the top 100 companies by revenue and by CSR spending in fiscal 2020. Of these 200, 70 companies appeared in both the lists, while 60 appeared in only one, leaving 130 unique companies. These 130 have spent ~Rs 8,500 crore (including support through corporate groups²) on Covid-19, across the two waves, as of June 2021.

The continued improvement in spending and reporting on CSR is heartening, for sure. The successive waves ofCovid-19 have, however, been a litmus test of corporate altruism – with companies having to balance employee well-being initiatives, business imperatives and their social contract. Given the expectations of a third wave, the probability of diverting more funds during this fiscal seems imminent. Thus, how long the momentum holds remains to be seen.

Coming back to fiscal 2020, the number of companies and their cumulative spending printed higher yet again, with over two-thirds of the eligible listed ones spending 2% or more of their net profits on CSR initiatives, and ~10% spending 3% or more.

Among sectors, manufacturing, energy and financial services accounted for over 60% of the spending. Public sector companies (accounting for ~7% of the total eligible companies) contributed ~32% of the total CSR spending, while private ones (accounting for 87% of total eligible companies) spent ~63%.

¹ https://www.mca.gov.in/Ministry/pdf/Covid_23032020.pdf
² Refers to consolidated donations which have been made at a corporate group/entity level