The reporting of corporate social responsibility (CSR) spending is growing faster in India than anywhere else in the world.
After the new Companies Act made it mandatory for companies with a net worth of Rs 500 crore or with annual turnover of Rs 1,000 crore to spend under CSR, India’s total CSR reporting increased by 27% in 2015, the maximum among 45 countries surveyed by international audit firm KPMG.
Out of the total outlay of Rs 6,490 crore towards CSR in India for 2015, companies have spent Rs 5,115 crore. The health sector accounts for 20% of the spending followed by education with 19%. Maharashtra has 205 projects under CSR, the maximum among Indian states, followed by Karnataka (152), West Bengal (123) and Tamil Nadu (122). The laggards in spending under CSR are some public sector undertakings, says the survey. Union finance minister Arun Jaitley had mentioned the results of the survey in the Lok Sabha on Friday.
“The Indian government has encouraged companies to invest in and report on social activities. Since 2013, it has been mandatory for large companies to report on CSR projects undertaken and to disclose details including spending on these projects in their annual report. Along with a requirement for the top 100 listed entities to report, India now has the highest CSR reporting rate worldwide,” said KPMG India director Santhosh Jayaram.
Asia Pacific, which lagged behind other regions in 2011, has risen to become the leading region for CSR reporting over the last four years. This growth has been driven by a surge in reporting in countries such as India, Taiwan and South Korea, where mandatory and voluntary reporting requirements have been introduced, the KPMG report said.
The performance of Indian origin companies is far ahead compared to foreign-based companies operating in India. While companies based in India have a target of Rs 5,779.68 crore for 2015, they have spent Rs 4,708 crore. But out of the target of Rs 710.12 crore for foreign-based companies, only Rs 406.17 crore has been spent. Among Indian companies, the private sector has performed far better than the public sector. Against the prescribed amount of Rs 2,306 crore, PSUs spent Rs 1,628 crore (71%).
The energy and power sector accounted for the highest expenditure under CSR. Nearly Rs 1,994 crore (39%) of total spending is by the power sector followed by banks and IT firms (13% each), mining and metals (11%), and consumer goods (9%).
This article was taken from here.