What Exactly is CSR?

In India, we know of many companies that carry out philanthropic activities voluntarily. But in the year 2013, the Indian government has brought a law that made this voluntary contribution mandatory. India is the first country in the world to do so.

As per the Companies Act 2013, companies that fall under particular criteria are mandated to spend a part of their profits for the betterment of society as Corporate Social Responsibility (CSR). Companies qualifying the criteria are required to form a CSR committee and spend 2% of average profits for the previous three financial years on CSR activities.

The qualifying criteria:

• A company with a net worth of Rs. 500 crores or more, or • A company with an annual turnover of Rs. 1000 crores and more, or

• A company that generates a net profit of Rs. 5 crores or more

Following the criteria, major Indian businesses fall under the list of companies doing CSR activities. You must understand that the type of companies providing CSR in the country is from diverse fields. And their CSR activities are also diversified.

CSR providing companies include both private companies and public sector companies. As per Schedule VII of the Companies Act 2013, CSR providing companies can contribute towards the following:

1. Eradicating hunger, poverty and malnutrition

2. Promoting education

3. Promoting gender equality

4. CSR initiatives related to the environment

5. Protection of national heritage, art and culture

6. Take measures that can benefit armed forces veterans, war widows, and their families

7. Contribute towards PM National Relief Fund or any other Central Government fund for the welfare of the SCs, STs, Women, minorities and backward classes

8. Contribute towards development of technology in Central Government approved academic institutions

9. Contribute towards rural area development and slum area development

Most of the CSR providing companies implement CSR activities by hiring other implementing agencies. A few projects they take up on their own. But, all the projects must be vetted by their respective CSR committees.

Among the hundreds of CSR providing companies, a few stand out. Here is a list of the top 20 CSR fund-providing companies in India. The companies are selected according to their CSR spending for FY 2019-20 as listed in theNational CSR Data Portal.

1. Reliance Industries Ltd (RIL)

Among the CSR providing companies, RIL tops the list. The petroleum to telecom conglomerate had the highest CSR spending for FY 2019-20 at Rs. 908.71 crores. The company’s major CSR focus areas are i. Health ii. Education iii. Rural transformation iv. Sports for development v. Women empowerment vi. Disaster response vii. Art, culture, heritage and environment

For RIL, CSR is a part of its business strategy where its business priorities coexist with the social commitment of holistic development of people and communities. The company has embedded the philosophy of inclusive growth into its CSR policy.