India Inc cuts back on charity in ’05

NEW DELHI: Corporate India, which opened its heart but more importantly the purse strings during FY05 due to a mega tragedy in the form of tsunami and the general elections in the country, reined in its donation drive last fiscal. Public listed companies cut back their charity by a third to shell out a sum of about Rs 280 crore cumulatively last fiscal.Among the big corporate donors in the country last year were Reliance Industries, Infosys, Jaiprakash Associates, GNFC and Jindal Steel.

An ET study of corporate donations reveals that a big chunk of the decline is accounted by the drop in contributions from the top 10 donors. As against FY05 when the top 10 donors gave away Rs 170 crore for various purposes, last fiscal the top 10 names donated just Rs 116 crore.

However, some of these companies, including entrants to the top slots, have increased their donations. Companies who gave away much more in charity last fiscal include Jaiprakash Associates, GNFC, Jindal Steel, Bharti Airtel, Pidilite, Satyam, M&M, BLB and Gujarat Alkalies, among others.

The overall drop last fiscal came on the back of a sharp jump in FY05 when corporate donations touched a new high with 75% increase to Rs 400 crore.

This was largely due to a sudden spike in donations coming from a number of corporate names both in the private and public sector. It also included companies such as NTPC, ITC, SCI, Dredging Corporation and Hindustan Zinc, who were traditionally way down in the list of corporate donors but gave away crores.

If last fiscal’s list is considered, the top slot continues to be occupied by Reliance Industries. The other top private sector donors last year included Infosys, Jaiprakash Associates, Jindal Steel, Hindalco, Bharti Airtel, Bajaj Auto, Dr Reddy’s, Grasim and M&M.

One significant difference last year was drop in charity from public sector companies like IOC, HPCL, SCI, NTPC and GAIL, who were big time donors in the previous year.

MNCs were much lower down the list of corporate donors, which is expected given the tight expenditure control norms for MNC subsidiaries. The biggest public limited MNC donors include Merck (Rs 1.05 crore) and Cummins (Rs 1.03 crore). The total number of listed companies who donated any amount, howsoever small, last year also fell by a quarter to about 520.