In fiscal year 2023 (FY23), Indian companies’ spending on corporate social responsibility (CSR) grew at a slower pace than their average net profits. The Companies Act mandates that companies spend 2% of their three-year trailing average net profit on CSR activities. However, in FY23, CSR spending as a percentage of net profit fell to a six-year low of 1.87%, down from 2.02% and 2.13% in the previous two fiscal years. This was the case despite a 13% increase in average net profits during this period.
HDFC Bank
and
Tata Consultancy Services
were the biggest CSR spenders, shelling out ₹821 crore and ₹783 crore respectively. The energy and power giants
Reliance Industries
and
NTPC
were also among the top spenders. Notably, 30% of companies spent as much as prescribed, while 49% exceeded their required spending. However, there were also 75 companies that were not required to spend on CSR, either because they reported a loss or did not generate enough profit, who collectively spent ₹142 crore on such activities in FY23.
Jindal Steel & Power
and
ICICI Bank
were among those companies who exceeded their prescribed spending. Even companies reporting losses contributed to CSR, with
Bharti Airtel
spending ₹21 crore despite a loss of ₹4,000 crore over the three years to FY23, and
Yes Bank
spending ₹17.5 crore despite a net loss of ₹590 crore in the same period. CSR expenditure on environmental sustainability witnessed the biggest jump of nearly 76% in FY23, followed by education (41%) and rural development (26%). Spending on disaster management fell by the most (77%), followed by slum development (75%) and the PM’s relief fund (59%). CSR expenditure on hunger, poverty, and healthcare saw a slight dip from ₹876 crore in FY22 to ₹804 crore in FY23. Notably, despite the recent amendment by the ministry of corporate affairs exempting companies from disclosing their CSR spending details, 610 out of 1,296 companies voluntarily disclosed this information in FY23.
