GS paper 2
Syllabus: Development process and the development industry-the role of NGOs, SHGs and various other groups and associations, donors, charities etc
Context: Since the establishment of the CSR regime in India under Section 135 of the Companies Act 2013, CSR spending in India has risen from ₹10,065 crores in 2014-15 to ₹24,865 crores in 2020-21.
CSR data for companies:
- There is no data to verify whether the increase is commensurate with the increase in profits of Indian and foreign (having a registered arm in India) companies.
- Zero spending: There were 2,926 companies in 2020-21 with zero spending on CSR.
- Prescribed limit: Companies spending less than the prescribed limit of 2% rose from 3,078 in 2015-16 to 3,290 in 2020-21.
- Participation: There was also a decline in the number of companies participating in CSR.
- Private companies have registered their own foundations/trusts: To which they transfer the statutory CSR budgets for utilization.
- It is unclear if this is allowed under the Companies Act/CSR rules.
- Ashoka University’s Center for Social Impact and Philanthropy: It says that 54% of CSR companies are concentrated in Maharashtra, Tamil Nadu, Karnataka and Gujarat (receiving the largest CSR spending)
- The populous Uttar Pradesh and Madhya Pradesh receive little.
- Only 9% was spent on the environment compared to education(37%) and health and sanitation(29%).
- The Standing Committee on Finance observed that the information regarding CSR spending by companies is insufficient and difficult to access.
- National-level platform centralized by the MCA: Where all States could list their potential CSR-admissible projects so that companies can assess where their CSR funds would be most impactful across India.
- Invest India’s ‘Corporate Social Responsibility Projects Repository’ on the India Investment Grid (IIG): It can serve as a guide for impactful efforts.
- Companies need to prioritize environmental restoration: In the area where they operate, earmarking at least 25% for environmental regeneration.
- Involvement of locals: All CSR projects should be selected and implemented with the active involvement of communities, district administration and public representatives.
Q. How can the role of NGOs be strengthened in India for development works relating to the protection of the environment? Discuss throwing light on the major constraints. (UPSC 2015)