Here's how to make strategic CSR count

In developing countries like India, the state has traditionally been a provider for most citizens. But, over time, India Inc has extended a helping hand by being an engine of growth and a job creator. India Inc's corporate social responsibility (CSR) spend has also grown. According to the corporate affairs ministry last week, it stood at ₹26,210 crore in FY2021, up 80% from FY2016. Unfortunately, the impact of CSR funds, according to the ministry newsletter, has not been 'widely felt'. This needs enhancement. CSR efforts should be executed strategically, with the right balance of capital investments and operational expenses. The ministry also expressed concerns over the wide regional disparity in deploying funds and called on companies to balance their area preference with national priorities.

The CSR provision, under the Companies Act 2013, stipulates that a company with a net worth of ₹500 crore or more, or a turnover of ₹1,000 crore or more, or a net profit of ₹5 crore or more during a financial year must spend 2% of its average net profit during the three immediately preceding financial years on CSR activities. But challenges exist: inability of companies to weave CSR into the heart of their business strategies, limited availability of well-governed non-governmental organisations to roll out projects, and failure of companies to make local communities part of a project's journey.

With the 2030 Sustainable Development Goals (SDGs) finishing line in sight and pressure increasing to meet the goals, it's time to iron out these issues and revitalise the partnership between key stakeholders. As the Indian economy grows, so will the CSR kitty. Let's make the best use of it. Every drop counts.