There has been a 9 per cent rise in the quantum of unspent money set aside by the NSE-listed companies towards the mandatory social spends in financial year 2018 at Rs 17.17 billion, even as there has been an 11 per cent rise total spends at Rs 100.3 billion in the year, says a report.
The unspent component of the mandatory corporate social responsibility (CSR) rose to Rs 17.17 billion in the financial year 2018 as against Rs 15.74 billion in the previous financial year, according to the data released Tuesday by Prime Database.
The agency did not offer any particular reasons for a large quantum of money going unspent, though. It could be because of there was no demand for the money from third-party agencies or it could be a reflection of the overall rise in the profitability of these companies.
The new Companies Act of 2013 mandates publicly traded companies with Rs 1 billion in annual profit or Rs 5 billion in annual turnover to set aside 2 per cent of their profits for affirmative/inclusive social action.
Only half of the 1,708 companies listed on NSE have a CSR committee in place despite the CSR Act mandating the same.
However, the overall spends by the 1,080 NSE-listed companies who fall under the 2 per cent mandatory CSR spend category rose 11 percent in financial year 2018 to Rs 100.3 billion from Rs 90.6 billion in the previous year.
In the past four years since the introduction of the mandatory CSR spends, the spending by the NSE-listed companies has grown at a compounded rate of 16 per cent per annum.
It said inequalities reduction, national heritage, the Armed forces, sports, technology incubators and slum development were the most neglected areas when it comes to corporates choosing for their CSR spends.
The spending list was topped by education sector at Rs 38.17 billion and followed by healthcare which saw inflows of Rs 25.09 billion, it said.
Maharashtra topped the list of states receiving the largest amount of money for CSR, followed by Gujarat and Rajasthan, while eight states saw a decline in spends.
The top companies in the list of spenders were led by Reliance Industries at Rs 7.45 billion, followed by ONGC (Rs 5.03 billion), TCS (Rs 4 billion and HDFC Bank (Rs 3.74 billion), it said.
The total number of companies which missed the mandatory 2 per cent CSR spend target came down to 345 in FY18 from 361 in the previous year, it said.