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India Inc's philanthropic spends have grown by 3.62 per cent to Rs 22,000 crore in FY21 as profits expanded, and a majority of the allocations have been done to pandemic-linked causes, a report said on Tuesday.
The report by rating agency Crisil said that while the first wave saw greater spending in cash largely through the PM-CARES Fund, the preference shifted to more direct support through in-kind spends in the second wave.
Corporate contributed only Rs 85 crore to the PM-CARES Fund during the second wave between March and June 2021, as against Rs 831 crore to what was classified as 'others'.
During the first wave between March and May 2020, they had contributed Rs 4,316 crore to the PM-CARES Fund and Rs 3,221 crore to others.
"Given the severity of the latter (second wave), support largely came in the shape of supporting the healthcare infrastructure with equipment such as ventilators, oxygen concentrators, cylinders, testing kits, and donation of food/ ration – where an exact monetary value could not be ascribed," the report said.
The report, released on Tuesday, said assuming that the spending was around the mandated mark of 2 per cent of average profit of the preceding three fiscals, eligible companies would have spent Rs 22,000 crore on corporate social responsibility (CSR) in FY21 as against Rs 21,231 crore in FY20.
The FY21 spends will include Rs 14,986 crore by more than 1,700 listed companies and Rs 7,072 crore by unlisted entities, it said, adding that this compares with Rs 14,431 crore by 1,387 listed companies and Rs 6,800 crore by 19,962 unlisted ones, it said.
The agency said the overall CSR spends have crossed Rs 1 lakh crore within seven years of the controversial mandate on CSR spending getting effected through changes in the Companies Act.
It added that over 40 per cent of the spending has happened just in the last two fiscal years alone and with the possibility of a third COVID wave, there is a high likelihood of more money coming in for the pandemic-related causes.
“The successive waves of Covid-19 have been a litmus test of corporate altruism – with companies having to balance employee well-being initiatives, business imperatives and their social contract.
"Given the expectations of a third wave, the probability of diverting more funds during this fiscal seems imminent,” Maya Vengurlekar, the chief operating officer of Crisil Foundation, said.
Most companies preferred to implement their CSR mandate through non-government organisations or trusts, the report said.
In fiscal 2020, sector-wise participation was similar to the previous year, with more than half the companies across sectors spending 2 per cent or more, it said, adding companies in the financial, information technology, and energy sectors punching above their weight.
From a geographical distribution perspective, Maharashtra continued to lead with Rs 6,710 crore spent in FY20 as against Rs 5,679 crore in FY19, the report said, adding that the western state was followed by National Capital Region and Gujarat.