Rising CSR Expenditure in India: A Five-Year Financial Analysis (2019-2024):

Rising CSR Expenditure in India: A Five-Year Financial Analysis (2019-2024) The government maintains a central record of Corporate Social Responsibility (CSR) expenditure reported by companies through the MCA21 system. All details about CSR spending, such as information by state, year, company, and project, are publicly available on the website www.csr.gov.in. Under the Companies Act, 2013, Corporate Social Responsibility (CSR) is mainly the responsibility of the company’s Board of Directors. The Board has the authority to plan, approve, implement, and monitor the company’s CSR activities. To ensure transparency and accountability, the law requires the formation of a CSR Committee, the preparation of a CSR Policy, the creation of an Annual Action Plan for CSR, Certification of CSR spending by the Chief Financial Officer (CFO) and the audit of CSR expenses by the company’s statutory auditors.

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According to Rule 8 of the Companies (CSR Policy) Rules, 2014, if a company has an average CSR obligation of Rs. 10 crore or more during the three immediately preceding financial years, it must conduct an impact assessment of its CSR projects. This assessment must be carried out by an independent agency and should cover projects that had an outlay of Rs. 1 crore or more and were completed at least one year before the impact study is undertaken. Additionally, all companies are required to disclose details of their CSR activities and impact assessments in the Annual Report on CSR, which also includes the annual CSR action plan, which is part of the Board’s Report. There is no specific provision in the CSR legal framework that allocates CSR funds. As per Section 135(5) of the Companies Act, companies that fall under the CSR mandate are required to spend at least 2% of their average net profits from the three immediately preceding financial years on subjects listed in Schedule VII of the Act.

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Based on the annual filings submitted by companies in the MCA21 registry, the CSR expenditure over the last five financial years has shown a steady increase. In FY 2019-20, companies spent Rs. 24,965.82 crore on CSR activities. This increased to Rs. 26,210.95 crore in FY 2020-21 and Rs. 27,141.45 crore in FY 2021-22. The spending further rose to Rs. 30,932.08 crore in FY 2022-23, and it reached Rs. 34,908.75 crore in FY 2023-24.