Healthcare to Swachh Bharat, how firms spent CSR fundshttps://indianexpress.com/article/india/india-news-india/healthcare-to-swachh-bharat-how-firms-spent-csr-funds/

Healthcare to Swachh Bharat, how firms spent CSR funds

Top 50 companies spent over Rs 4,600 cr in 2014-15 on CSR activities, most of them focussed on areas of their business operation.

Swachh Bharat, Swachh Bharat mission, Swachh Bharat officers, Swachh Bharat incharge, India news
Healthcare, education, environment and Swachh Bharat initiative dominated the sectors where money was spent by these companies.

Forced to spend a portion of their profits on activities linked to corporate social responsibility (CSR) to meet the requirements of the Companies Act 2013, India’s top 50 companies that make up the benchmark Nifty index at the National Stock Exchange claim to have spent over Rs 4,600 crore in the financial year ended March 2015 on social initiatives. Healthcare, education, environment and Swachh Bharat initiative dominated the sectors where money was spent by these companies.

However, as they opened their purse strings, the biggest beneficiaries were the states that already have a sizeable corporate presence such as Maharashtra, Gujarat, Delhi, Tamil Nadu, Karnataka and Andhra Pradesh. On the other hand, North-Eastern states and others that have low industrial and business activity, such as Bihar, Uttar Pradesh, Jharkhand, saw little CSR spend going their way.

There was also a change in the area of expense. For example, the biggest CSR spender — Reliance Industries Limited — moved its spending away from education and towards healthcare. In the year ended March 2015, almost 80 per cent of the CSR expenditure by the company was in healthcare.

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The CSR spend of Nifty companies, collated and analysed by The Indian Express, shows that the 50 companies (except for HCL Technologies) managed to spend Rs 4,609 crore, or over 80 per cent of the total outlay of Rs 5,731 crore mandated to be spent in 2014-15.

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While most of the companies spent CSR money on education, vocational training to unemployed youth, health, environment, sanitation, drinking water, agriculture support to farmers, rural infrastructure like all- weather roads, sustainable livelihood and women empowerment, there were some interesting initiatives.

For instance, Bajaj Auto Ltd spent on Vedanta cultural foundation for teaching and propagating Vedanta philosophy, and HDFC Ltd contributed towards strengthening the infrastructure for tiger reserves. A few companies also focused on sports.

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Among the Nifty companies, RIL was the biggest spender for the year, reporting a spend of Rs 760.5 crore, significantly higher than the Rs 454 crore or the mandated 2 per cent of the company’s average net profit over the last three years. The company is reported to have spent 3.35 per cent of its average net profit on CSR activity, largely focusing on the healthcare sector that accounted for 80 per cent of its CSR spend for the year.

The company spent Rs 608 crore on rebuilding Sir H N Reliance Foundation Hospital and towards Dhirubhai Ambani hospital. However, while the company raised its spending on healthcare, it slashed its CSR funding in the education sector — down from 30 per cent of the total CSR spend in 2011-12 to 2.9 per cent in 2014-15.

An email to RIL seeking the break-up of the healthcare spend and the reason for shift in expenditure from education to healthcare, did not elicit any response.

Among the other major spenders, state-run ONGC spent a total of Rs 495 crore on CSR activities. However, it could not spend the total amount — Rs 660 crore — allocated for the year on the ground that most of the projects undertaken were in transition phase. “Some of the flagship projects undertaken were of long gestation period with budget spread over 3-5 years thus resulting in lesser utilisation of earmarked budget for the financial year 2014-15,” according to ONGC.

Coal India, Infosys and TCS were other major spenders though TCS could not spend the amount allocated for the year. Companies gave several reasons for not spending the mandatory 2 per cent amount.

“Since most of these projects are being executed in a dynamic environment, encompassing various stakeholders, projects do tend to get delayed, sometimes even stalled. Just to achieve our spending target, we will not disburse funds on projects which are not ‘sustainable’ or not delivering ‘results’. The CSR fund that was unspent is being carried forward next year and will be rightfully spent/ reallocated as the case may be,” said Bharat Petroleum Corporation Ltd.

Similarly, several companies said that since 2014-15 was the first year for complying with the new norms, they were in the process of evaluating the focus areas and locations for intervening for CSR activities so as to ensure optimal impact.

While most of the companies routed their CSR spends in the area of their business operation, a handful of them such as Axis Bank spent the money across the country including all North-Eastern states. Axis Bank spent Rs 123.22 crore of the allocated Rs 133.77 crore towards education, livelihood enhancement, skill development, rural development, healthcare, environmental sustainability, sanitation among others in Andhra Pradesh, Arunachal Pradesh, Manipur, Meghalaya, Gujarat, Bihar, Chhattisgarh, Nagaland, Mizoram among others.