Subhash mittal

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Subhash mittal

  1. 1. Presentation at E&H Conference, Saharanpur, UP 25 October 2013 Findings of CSR Study & Role of CSR in UP By Subhash Mittal, FCA Secretary, Socio-Research & Reform Foundation E-mail: socio-research@sma.net.in
  2. 2. Background to the Report  Desire to learn about CSR, before talking about it.  Huge interest one saw in CSR - from civil sector, from industrialists, from academicians.  Very little hard facts available on CSR in the country  A desire to promote CSR in a manner that it becomes a sustainable and effective instrument by creating a win-win situation. Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  3. 3. Scope  Arrive at scope of CSR Interventions in terms of funding  Identify popular sectors for CSR intervention  Identify methodology of implementation Additional scope  Assess transparency in the sector and develop measurement tools for the same Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  4. 4. Methodology            Discussing ToR with various stakeholders Understand the sector by discussing it with Industry & Sector representatives Participate in discussion groups on CSR to develop better understanding Prepare list of top 100 corporates by turnover (List as per ET500) Undertake study of individual company’s Annual Reports, Business Responsibility Report and CSR Reports Develop matrix tables for capturing critical information, which is comparable Data captured is properly documented for subsequent verification Ensure sufficient checks for all data captured Summarise and analyse the results Prepare a report Disseminate the results through public platforms Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  5. 5. Evolution of CSR       Traditionally CSR undertaken by city seths through dharmshala, pios, etc. ~ based more on religious sentiments Gandhiji’s call for ‘Trusteeship’ was an important part of evolution of CSR in country. Several industrialists of this era have contributed to welfare (GD Birla, Jamanalal Bajaj, Sarabhai, Murugappa Group, to name a few) Institutions like BITS Pilani, IIM Ahemdabad, Physical Research Lab, Shri Ram College, etc are all result of initiatives of industrialists 50s -70s was lull period for CRS Huge growth in CRS since the industrial growth has picked up Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  6. 6. Legal basis of CSR Private sector  Presently no legal requirements though corporates try to provide 0.5% -1.5% of their PAT for CSR. Even lossmaking companies contributing.  Clause 135: CSR mandatory for organisation satisfying any of three conditions:  Minimum Turnover Rs 1000 crore, or  Networth Rs 500 crore, or  Net profit in any financial year Rs 5 crore or more.  Mandatory 2% CSR, CSR Committee (3), Board accountable for ensuring mandatory spending otherwise explain through Directors’ Report Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  7. 7. Legal basis of CSR…………….cont’d  Board to formulate policy to indicate activities to be undertaken. Presently permitted activities covered under Sch VII.          Eradication of extreme Hunger & Poverty Education Women Empowerment Child Mortality & Maternal Health HIV, Malaria & other diseases Environment Sustainability Skill Enhancement Social Enterprise projects PM / CM or similar other Relief funds  Give preference within vicinity of the operational area  Board to monitor Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  8. 8. Legal basis of CSR…………….cont’d PUBLIC SECTOR:  Central Public Sector Enterprises need to provide for as follows:    Less than Rs 100 cr Profit Rs 100 cr – Rs 500 cr Above Rs 500 cr : 3%-5% : 2% -3% : 1% - 2%  CSR amount once allocated would not lapse Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  9. 9. Major Findings - Spending  CSR Contribution of top 100 corporates comes to around 0.82% of PAT, which comes to Rs 2650 crores.  Biggest CSR spending (in absolute terms) by      Reliance Industries Coal India Tata Steel SBI ONGC Rs 357 crores Rs 151 crores Rs 146 crores Rs 123 crores Rs 121 crores Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  10. 10. Major Findings - Spending No. of Companies CSR Spending as % of PAT 31 35 27 30 25 17 20 11 15 10 8 6 5 0 Categories - % of PAT Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  11. 11. Sector – wise Spending Sector-wise CSR Interventions 100 No. of Compnaies 90 80 70 60 50 40 86 78 30 44 20 53 60 47 29 10 0 16 Education Health Skill Enhancement Livelihood & Financial Inclusion Environment Women Empowerment Disaster Relief Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013 7 Sports Others
  12. 12. CSR Projection Anticipated CSR Contribution (in crores) Anticipated CSR Contribution as per new Companies Act 7000 6279 6000 5000 4000 3000 76% 2000 939 1000 11% 0 1 to 100 101 to 200 512 302 199 6% 4% 2% 201 to 300 301 to 400 401 to 500 Category of Companies as per ET-500 Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  13. 13. Implementation Strategies  Larger CSR programmes are undertaking wider approach  Infosys works in education in large number of areas  Reliance is undertaking large number of programmes through different parts of the countries  Banks work for financial inclusion through their branches  A large number of CSR programmes interventions are around factories / units (Hero)  Nasscom aligns with its core strength – IT  NIIT has evolved a novel method – low cost IT education Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  14. 14. Partnering with NGOs Implementation Methodology No Information, 9 Foundation only, 11 Foundation plus NGOs, 47 NGOs only, 33 Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  15. 15. Model developed to measure Transparency in CSR  Has company disclosed CSR contribution for the year ? (3)  Has company distinctly disclosed activities undertaken during the year ? (3)  Does it prepare Business Responsibility Report ? (2)  Does it disclose a CSR strategy ? (1)  Are CSR activities disclosed on web? (1) Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  16. 16. Transparency relating to CSR     47 cases CSR amount has not been disclosed No distinct information about 32 cases what CSR activities undertaken during the year Even among 68 cases where we have taken CSR information for the year as available, one would need to put in great effort to decipher this. Study has developed a CSR Transparency Index. We hope this will help in improving disclosure of CSR. 10 out of 10 22 companies 5 or less out of 10 53 2 out of 10 5 1 out of 10 7 0 out of 10 4 Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  17. 17. Scenario within ‘UP’    Huge need considering 33% of population falls within 6-18 age group Another 13% fall in 0-5. Large funds available with the Govt for Education sector. FY 2013-14 allocations - State education allocation Rs 32886 cr - SSA allocation almost Rs 9000 cr - per capita allocation of Govt funds vis-à-vis population segment of 6-18 is around Rs 6339 Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  18. 18. Main Issues to be considered      CSR has potential to evolve into a major source of development intervention. Education & Health are two major areas of intervention of CSR. Need to develop an integrated approach involving Govt, CSOs and CSRs. There is a need to develop mechanism to support CSRs in identification of credible CSOs. Developing a genuine Partnership Framework between a corporate & CSO. Findings of CSR Study & Role of CSR in UP by Subhash Mittal E&H Foundation, Saharanpur, 25 Oct 2013
  19. 19. Thank You.

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