New Delhi, March 27 (IANS) A majority of Indian industry expects to spend more on social welfare activities in the next fiscal with corporate social responsibility (CSR) increasingly becoming part of corporate strategic decision-making, industry chamber FICCI said on Sunday citing its survey.
“There is a discernible trend in CSR activity becoming more a part of strategic decision- making for companies. It clearly brings to the fore how companies are complying with the Companies Act 2013 and how they are integrating CSR reporting into their main business practices,” the Federation of Indian Chambers of Commerce and Industry said in a statement here.
The Companies Act, 2013, mandates that a category of profitable firms spend at least 2 percent of their three-year average annual net profit towards CSR activities.
FICCI said while 83 percent of the survey participants anticipate an increase in their CSR spending in 2016-17, 77 percent reported an increase in their CSR budget in 2014-15, compared with the 2013-14 period.
“While 6 percent participants expected a decline, another 9 percent cited no change. The remaining 2 percent of the companies said that they have made a CSR allocation in their budget for the first time,” it said.
The survey was conducted between January and February this year covering 150 respondents, which include public sector undertakings, private firms and foreign multinational companies with a turnover ranging between Rs.1.7 crore and Rs.75,000 crore.
However, the survey also found that “inadequate clarity on laws and tax related regulations”, among others, was seen as an obstacle by firms in implementing CSR.
The majority of the respondents noted ethical considerations as the primary motivating factor behind adoption of CSR activities.
“Companies are increasingly looking at integrating their businesses with the community to create shared value. About 49 percent of the respondents stated creation of shared value as a motivation factor, followed by social good compliance,” said FICCI.
“It is encouraging to note that companies have continued to base their CSR programmes according to community needs aligning with the national development agenda, especially those impacting women and children,” said Ficci-Aditya Birla CSR Centre for Excellence chairperson Rajashree Birla.