With New Acts and Amendments in India, CSR is Becoming an Integral Part of Decision Making Among Companies
As per a survey analysis by FICCI, it has been stated that in India, CSR activity promotion and implementation is becoming a fundamental part of decision making for companies and organizations. Previously FICCI had conducted a data analysis on similar grounds based on the companies listed in National Stock Exchange in partnership with another company. This time the analysis was based on a real time survey. FICCI also stated that the government acts and regulations are becoming the base pointers for these companies in order to prioritize CSR activity.
The survey had been conducted during the span of January and February this year and includes responses from 150 different companies belonging to various industry domains. The responses have been analyzed based on three different segments, managerial participation in CSR implementation, project planning for implementation and budget allocation in the segment. As per the Clause 135 of the Companies Act 2013, the CSR committee of every company should include three or more directors, one of whom should be independent. On analyzing the responses, it was seen that close to of half of the companies have one independent director in the CSR committee. Around one fourth of the companies even had two independent directors. Secondly, the Schedule VII of the Companies Act, 2013 provides a comprehensive list of sectors wherein the CSR activities are most sought after. In this regard, the companies have put in effort towards educational benefits including vocational education, hunger and malnutrition management and health care initiatives, which is in line with the act. Most importantly, 95 percent of the companies reported that their CSR initiatives are in line with government regulations. Lastly, around 40 percent companies have indicated to perform CSR implementations through company foundations while 36 percent have performed it directly. In terms of budget allocation, around 77 percent of the companies have indicated an increase in budget allocation towards CSR from 2013–14 to 2014–15 while 9 percent of the companies budgets remain unchanged in the CSR segment. As per the Chairperson of FICCI, the companies have been making sincere and genuine efforts towards CSR activities being implemented in to various social segments and are working along the guidelines provided by the government. The prime focus areas of CSR implementation have been Swachhh Bharat Mission, Skill India and National Health Mission. It is also due to be mentioned that the women and children centric activities and programmes are the most crucial ones to be implemented.
Although there have been a considerable development in the CSR activity implementation, but the companies are still facing certain hindrances towards the same. There is still lack of clarity on the regulations and taxation norms which affect the CSR of companies and organizations. Land clearances and other legal aids like permits still remain in the confusion zone making the processes lengthy. Lack of credible NGOs, trained work force and understanding gap creates difficulty in this segment. But it can be expected that in the coming years, the issue will be resolved and more companies will be participating in this initiative.