Implications of the
2% CSR allocation
Twitter - @namratarana
2014 Summit on Social Media
& Online Giving
2. By 2020 India will be the 3rd largest
economy in the world
3. Can the move towards higher value, volume and proﬁt be
made while giving back to society and the environment?
4. India is home to the largest number of poor and illiterate
5. 3 out of 10 people need to be taught how to read
6. 4 out of 10 people need to be given food
7. Every year a million children need to be saved before they
are a month old and another million before they are 5
8. Every year 15000 farmers need to be given hope
9. A quarter of the population needs to be taken out of the
10. Over 49% of urban areas and 65% of rural areas need to be
11. The need for growth will put extraordinary pressure on
our natural resources and our infrastructure.
Urbanization. Livelihood....are just
some of the several challenges India faces
12. The new Companies Bill has mandated that
organisations of a certain ﬁnancial strength spend
2% of their net proﬁt on corporate social
What are its implications?
13. Going by the government’s 2% norm Rs 63 billion is
expected to ﬂow in from India’s top 500 listed companies.
If we expand this list to the
top 1,000 corporations,
add MNCs, co-operative
banks and SMEs, then we
are talking about at least
Rs 120 billion.
Each of India’s 660
districts could get over
Rs 18 crore of this
14. 10 areas where the CSR Budget can be spent
i) Eradicating hunger, poverty and malnutrition,
promoting preventative health care and sanitation and making
available safe drinking water;
ii) Promoting education including special education and
employment enhancing vocation skills especially among children,
women, elderly, and the diﬀerently abled and livelihood
iii) Promoting gender equality, empowering
women, setting up homes and hostels for women and orphans;
setting up old age homes, day care centres and other such
facilities for senior citizens and measures for reducing inequalities
faced by socially and economically backward groups;
15. iv) Ensuring environmental sustainability, ecological
balance, protections of ﬂora and fauna, animal welfare,
agroforestry, conversation of natural resources and maintaining
quality of soil, air and water;
v) Protection of national heritage, art and culture
including restoration of buildings and sites of historical importance
and works of art; setting up public libraries; promotion and
development of traditional arts and handicrafts’
vi) Measures for the beneﬁt of armed forces
veterans, war widows and their dependents
vii) Training to promote rural sports, regionally
recognised sports, Paralympics sports
10 areas where the CSR Budget can be spent
16. 10 areas where the CSR Budget can be spent
viii) Contribution to the Prime Minister’s National
Relief Fund or any other fund set up by the Central
Government for socio-economic development and relief and
welfare of the Scheduled Castes, the Scheduled Tribes, other
backward classes, minorities and women;
ix) Contributions or funds provided by technology
incubators located within academic institutions which are
approved by the Central Government;
x) Rural development projects
17. A quick look at some of some research on what
companies are doing….
Research : Collaboration between Prof Utkarsh Majmudar and Namrata Rana
Supported by IIM Udaipur
India has the highest accident rate in
Reports of 19 auto companies reveal
a high focus on employees and
community (around manufacturing
SAFE DRIVING - a missed
India has 18 percent of the world’s
population and 4 percent of the
globe’s water resources.
We studied the annual reports and
websites of steel companies and
found that 9 out of 22 companies do
not have any information on water
We found that over 56 International
toy brands are sold in India. Parents
are increasingly concerned about
responsible - safe - non toxic - non
Of these 56 companies only 11
company websites mention CSR
activities of which only 4 - LEGO,
Mattel, Walt Disney and Wild
Republic Toys talk of socially
responsible activities being
conducted in India.
Plastics are one of worst products to
dispose, taking hundreds of years to
Out of the 12 companies studied only
one, produces a sustainability report.
The remaining companies provide information through their annual reports and websites.
Almost no focus on reuse - recycle
aspects of plastic.
Mostly market to women and children -
large TV and Print budgets.
Out of the total sample of 32 companies we
ﬁnd that only 18 companies have initiatives
that focus on Women and Children.
5 companies are doing health & hygiene related activities.
4 companies have activities that focus on Child
5 companies are doing activities that support education
and related activities.
5 companies focus on empowering women through skill
upgradation and capacity building programs.
23. Implementing the 2% mandate is not easy
Corporates face many challenges……
CSR in many companies is either part of
HR or Corporate Communications.
Need for a separate
department with speciﬁc
CSR budgets are expected to double,
this will also lead to increased scrutiny
Need for re-skilling of
existing teams and
establishment of processes.
Many CSR initiatives have been ad hoc
and not necessarily linked to
Need for a strategic focus +
Study of stakeholders needs and
aspirations, + an action plan that
can run for several years
CSR initiatives in the past may not have
formed part of standard corporate
Need to assess, monitor
and report initiatives and
28. What should be spent, where and on whom? Can you
help companies achieve their strategic goals?
Are you ready for the challenge?