-The results on CSR expenditures by firms in the fiscal year 2015-16 were released recently.
-Indian companies spent Rs9,309 crore on CSR projects in 2015-16, which was Rs163 crore more than the amount required by law.
-But we can't say CSR was a success based on this figure only.
-What are the drawbacks of CSR prgram?
>It is not clear whether firms have really increased their CSR spending after the law, compared to what they were spending voluntarily before the law, because CSR spending was not well reported historically.
Some companies,who used to spent more than 2% of their profits on social welfare,started to spend just 2% now.
>The spending has not gone to democratically determined priorities, but rather to whatever the companies prefer to emphasize.
Reducing child mortality received no funding and eradicating extreme hunger and poverty received only 6% of the total CSR expenditure.
While about 50% of children in India are malnourished due to pervasive poverty.
Thus,the fund allocations from CSR are skewed.
>Geographic inequity.
Five states: Maharashtra, Gujarat, Andhra Pradesh, Rajasthan and Tamil Nadu account for well over one-quarter of all CSR spending.
Towards the bottom of the list are Nagaland, Mizoram, Tripura, Sikkim and Meghalaya—all from the NorthEast.
-Steps to be taken by the government.
>CSR law should be made more well defined and coercive on companies.
>Priority areas of spending should be well defined.
>Government should take adequate steps in ensuring geographic equity in CSR contributions over the country.
Source:Livemint
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