Subhash mittal

Presentation at E&H Conference, Saharanpur, UP
25 October 2013

Findings of CSR Study
& Role of CSR in UP
By Subhash Mittal, FCA
Secretary, Socio-Research & Reform Foundation
E-mail: socio-research@sma.net.in

Background to the Report
 Desire to learn about CSR, before talking about it.
 Huge interest one saw in CSR - from civil sector, from
industrialists, from academicians.
 Very little hard facts available on CSR in the country
 A desire to promote CSR in a manner that it becomes a
sustainable and effective instrument by creating a win-win
situation.

Findings of CSR Study & Role of CSR in UP by Subhash Mittal
E&H Foundation, Saharanpur, 25 Oct 2013

Scope
 Arrive at scope of CSR Interventions in terms
of funding
 Identify popular sectors for CSR intervention
 Identify methodology of implementation
Additional scope
 Assess transparency in the sector and develop
measurement tools for the same


Methodology
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Discussing ToR with various stakeholders
Understand the sector by discussing it with Industry & Sector
representatives
Participate in discussion groups on CSR to develop better
understanding
Prepare list of top 100 corporates by turnover (List as per ET500)
Undertake study of individual company’s Annual Reports, Business
Responsibility Report and CSR Reports
Develop matrix tables for capturing critical information, which is
comparable
Data captured is properly documented for subsequent verification
Ensure sufficient checks for all data captured
Summarise and analyse the results
Prepare a report
Disseminate the results through public platforms

Evolution of CSR
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Traditionally CSR undertaken by city seths through
dharmshala, pios, etc. ~ based more on religious
sentiments
Gandhiji’s call for ‘Trusteeship’ was an important part of
evolution of CSR in country.
Several industrialists of this era have contributed to
welfare (GD Birla, Jamanalal Bajaj, Sarabhai, Murugappa
Group, to name a few)
Institutions like BITS Pilani, IIM Ahemdabad, Physical
Research Lab, Shri Ram College, etc are all result of
initiatives of industrialists
50s -70s was lull period for CRS
Huge growth in CRS since the industrial growth has
picked up

Legal basis of CSR
Private sector
 Presently no legal requirements though corporates try to
provide 0.5% -1.5% of their PAT for CSR. Even lossmaking companies contributing.
 Clause 135: CSR mandatory for organisation satisfying
any of three conditions:
 Minimum Turnover Rs 1000 crore, or
 Networth Rs 500 crore, or
 Net profit in any financial year Rs 5 crore or more.
 Mandatory 2% CSR, CSR Committee (3), Board
accountable for ensuring mandatory spending otherwise
explain through Directors’ Report

Legal basis of CSR…………….cont’d
 Board to formulate policy to indicate activities to be
undertaken. Presently permitted activities covered
under Sch VII.
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Eradication of extreme Hunger & Poverty
Education
Women Empowerment
Child Mortality & Maternal Health
HIV, Malaria & other diseases
Environment Sustainability
Skill Enhancement
Social Enterprise projects
PM / CM or similar other Relief funds

 Give preference within vicinity of the operational area
 Board to monitor

Legal basis of CSR…………….cont’d
PUBLIC SECTOR:
 Central Public Sector Enterprises need to provide
for as follows:
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Less than Rs 100 cr Profit
Rs 100 cr – Rs 500 cr
Above Rs 500 cr

: 3%-5%
: 2% -3%
: 1% - 2%

 CSR amount once allocated would not lapse


Major Findings - Spending
 CSR Contribution of top 100 corporates comes
to around 0.82% of PAT, which comes to Rs
2650 crores.
 Biggest CSR spending (in absolute terms) by
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Reliance Industries
Coal India
Tata Steel
SBI
ONGC

Rs 357 crores
Rs 151 crores
Rs 146 crores
Rs 123 crores
Rs 121 crores


Major Findings - Spending

No. of Companies

CSR Spending as % of PAT
31

35

27

30
25

17

20

11

15
10

8

6

5
0

Categories - % of PAT


Sector – wise Spending
Sector-wise CSR Interventions
100

No. of Compnaies

90
80
70
60
50
40

86

78

30

44

20

53

60
47
29

10
0

16
Education

Health

Skill Enhancement

Livelihood & Financial
Inclusion

Environment

Women Empowerment

Disaster Relief


7
Sports

Others

CSR Projection
Anticipated CSR Contribution (in crores)

Anticipated CSR Contribution as per new Companies Act
7000
6279
6000

5000
4000
3000

76%

2000
939
1000
11%

0
1 to 100

101 to 200

512

302

199

6%

4%

2%

201 to 300

301 to 400

401 to 500

Category of Companies as per ET-500


Implementation Strategies
 Larger CSR programmes are undertaking wider
approach
 Infosys works in education in large number of areas
 Reliance is undertaking large number of programmes
through different parts of the countries
 Banks work for financial inclusion through their
branches

 A large number of CSR programmes interventions
are around factories / units (Hero)
 Nasscom aligns with its core strength – IT
 NIIT has evolved a novel method – low cost IT
education

Partnering with NGOs
Implementation Methodology

No Information, 9
Foundation only,
11

Foundation plus
NGOs, 47

NGOs only, 33


Model developed to measure
Transparency in CSR
 Has company disclosed CSR contribution
for the year ? (3)
 Has company distinctly disclosed activities
undertaken during the year ? (3)

 Does it prepare Business Responsibility
Report ? (2)
 Does it disclose a CSR strategy ? (1)

 Are CSR activities disclosed on web? (1)

Transparency relating to CSR
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47 cases CSR amount has not been disclosed
No distinct information about 32 cases what CSR activities
undertaken during the year
Even among 68 cases where we have taken CSR information
for the year as available, one would need to put in great effort
to decipher this.
Study has developed a CSR Transparency Index. We hope this
will help in improving disclosure of CSR.
10 out of 10

22 companies

5 or less out of 10

53

2 out of 10

5

1 out of 10

7

0 out of 10

4


Scenario within ‘UP’
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Huge need considering 33% of
population falls within 6-18 age
group
Another 13% fall in 0-5.
Large funds available with the Govt
for Education sector.
FY 2013-14 allocations
- State education allocation Rs 32886 cr
- SSA allocation almost Rs 9000 cr
- per capita allocation of Govt funds vis-à-vis
population segment of 6-18 is around
Rs 6339


Main Issues to be considered
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CSR has potential to evolve into a major source of
development intervention.
Education & Health are two major areas of intervention of CSR.
Need to develop an integrated approach involving Govt, CSOs
and CSRs.
There is a need to develop mechanism to support CSRs in
identification of credible CSOs.
Developing a genuine Partnership Framework between a
corporate & CSO.


Subhash mittal

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