Author – Kumudini Ethiraj

A recent report by Prime Database Group about Corporate Social Responsibility (CSR) spending by publicly listed companies in India indicates that CSR spending in India is on a remarkable growth trajectory. As a social change enthusiast who has worked in different social projects, here is why I believe India is truly witnessing something really significant.

CSR spending in India saw a remarkable jump of 16% to INR17,967 crores in the financial year 2023-24 compared to INR15,524 crores in FY2022-23. After three years of relatively flat spending (hovering around INR14,751 cr from 2019-20 to 2022-23, Indian companies finally broke through with substantial momentum.

What’s driving this surge? The underlying engine seems to be robust business performance. The average net profit of these companies over the last three years rose by an astounding 18% to INR9.62 lakh crore, creating a larger base for the mandatory 2% CSR contribution. This is not just compliance, it is also a way of giving back to create a more prosperous nation.

While corporate giants like HDFC Bank (INR945 crore), Reliance Industries (INR900 crore), and TCS (INR827 crore) dominate the spending charts, the broader participation of other companies also looks more encouraging. Around 1,394 companies were obligated to spend on CSR activities in FY2023-24, up from 1,297 the previous year. More companies crossing the threshold indicates that India’s corporate ecosystem is expanding and prospering.

What’s even more promising is that 98% of obligated companies (1,367 out of 1,394) actually spent on CSR. This high compliance rate suggests that CSR has moved beyond mere a regulatory checkbox-ticking activity to become an integral part of corporate culture.

Interestingly, 681 companies (49%) exceeded their prescribed spending. That is, nearly half of the mandated companies gave more than what they were legally required to! Companies like NTPC, Coal India, and Wipro went significantly above and beyond, with NTPC spending INR87.78 crore more than required.

Where the money goes: Sector-wise CSR spending in India

The sectoral breakdown reveals corporate India’s priorities, and they’re remarkably aligned with national needs:

• Education and vocational skills: INR1,104 crore (34.74%)
• Healthcare, hunger, and poverty: INR720 crore (22.66%)
• Environmental sustainability: INR217 crore (6.84%)
• Rural development:  INR215 crore (75%)
• Sports promotion: INR156 crore (4.91%)

With climate change becoming a top priority, there was a 54% increase in environmental sustainability spending as compared to the previous year.

Geographic Impact

The state-wise distribution shows a conscious effort to reach across India’s diverse landscape. Maharashtra (INR266 crore), Rajasthan (INR243 crore), and Tamil Nadu (INR215 crore) topped the recipient list, but the fact that the top 10 states account for only 60% of total spending suggests a reasonable geographic spread.

While 31% of companies prefer direct implementation, the majority (53% of total spending) flows through implementing agencies. This hybrid approach suggests a maturing ecosystem where companies are leveraging specialized expertise while maintaining direct engagement where appropriate.

Why be optimistic about CSR spending in India

Several trends in this data make me genuinely hopeful about CSR’s growth trajectory in India:

• Scale and growth: The 10-year trend shows consistent expansion from just INR6,548 crore in 2014-15 to around INR18,000 crore in 2023-24, which is nearly a threefold expansion in a decade.
• Voluntary compliance: The high rate of companies exceeding their funding requirements suggests CSR has become embedded in corporate DNA rather than remain just a compliance burden.
• Sectoral alignment: The focus on education and healthcare addresses India’s most pressing social challenges, while the surge in environmental spending shows climate consciousness.
• Professional validation: The increasing use of impact assessments (INR33.61 crore spent on evaluation) shows companies are serious about measuring and improving their social impact.

What needs attention

While celebrating these achievements, the data also reveals many areas for improvement. Around INR2,329 crore was transferred to unspent CSR accounts in FY2023-24, indicating challenges in implementation. Companies need better project identification and execution capabilities. The fact that areas such as slum development (INR3.21 crore) and disaster management (INR10.18 crore) received minimal attention suggests that we need more strategic thinking about addressing India’s most vulnerable populations.

The road ahead

As someone who has watched India’s CSR journey since the introduction of the new Companies Act in 2013, I find this evolution deeply encouraging. Eleven years ago, when the CSR mandate was introduced, pessimists worried it would become a mere tick-box exercise. Fast forward now, we are truly witnessing companies exhibiting a growing focus on CSR contributions and its long-term impact.

The trajectory is clear; CSR spending in India is not just surviving but thriving. With average 3-year profits having more than doubled since 2014-15, and compliance becoming the norm, India can now look forward for even more substantial social investments in the coming years.