Mumbai: India Inc’s investment towards the mandatory corporate social responsibility (CSR) saw a significant rise in FY16 with education and healthcare receiving a major portion of investment.
According to data analysed by PRIME Database, around 920 companies listed on the National Stock Exchange (NSE) had invested a total of Rs 8,345 crore in FY16 as part of their CSR, up 28 per cent from Rs 6,526 crore in FY15.
Interestingly, about 363 companies had invested much more than required by the law. Under the new Companies Act, companies with a net worth of Rs 500 crore and above or revenue of Rs 1,000 crore and above or net profit of Rs 5 crore and above have to spend 2 per cent of average net profits of last 3 years.
Under the CSR, companies had spend as total of Rs 2,042 crore towards the promotion of education accounting for 24 per cent of the total CSR spend while another Rs 1637 crore were spend towards combating human immunodeficiency virus, acquired immune deficiency syndrome, malaria and other diseases.
Contribution to the Prime Minister’s national relief fund witnessed the maximum increase (418 per cent) from Rs 168 crore in FY15 to Rs 701 crore in FY16. This was followed by spends on hunger or poverty alleviation (66 per cent) and gender equality (38 per cent).
On the other hand, CSR spend towards child mortality and maternal health saw the maximum decrease. “It is important to note that there could be overlap between the different schedules. For example, building toilets for women can be classified under healthcare as also under gender inequality,” noted Pranav Haldea, managing director, PRIME Database.
Reliance Industries Ltd tops the chart with maximum CSR spend at Rs 651.57 crore closely followed by state owned enterprises like NTPC and ONGC. They spend a total of `491.80 crore and `401.80 crore respectively in FY16.
However, it was the small and medium companies that had spend a higher proportion of their net profits on CSR activities. For instance, Energy Development Company, which had an average net profit of Rs 0.25 crore over the past three years spend Rs 0.15 crore (61.05 per cent of the net profit) towards CSR. Similarly, 20 Microns Ltd and Sundaram Clayton had spend 37.68 per cent and 25.26 per cent of their respective net profits in CSR activities.