Term paper

On
Analysis of corporate social responsibility spending of Indian
Companies: A comparison of private and public sector firms

Submitted to:

Submitted by:

Dr.(Prof.) G.S.Batra

Navjot kaur

Head of Department

Roll no. 1542246

School of management studies

Ph.d Coursework
Batch: 2015

Punjabi University
Patiala

Table of contents
Introduction.. 3-9

Review of literature...10-11

Statement of problem 12

Objectives of study.13

Research methodology14

Data analysis and interpretation..15-25

Findings...26

References...27

Introduction

The concept of social upliftment of society is into the existence either in the form of
philanthropy, dashvandh and now corporate social responsibility. For the emergence of any new
concept or garnishing of older one needs great mind and time too. Gandhijis concept of
trusteeship for businesses has been a definitive point in the evolution of CSR. The more the
concepts of CSR are fostered and integrated into the business process, the easier it will be to
benefit from alternative thinking and perhaps handle the occasional problems that for certain will
occur. The more integrated the business process within the value chain, the more opportunity
there will be for organizations to influence the approaches of others on whom they depend. The
concept of CSR includes the openness or transparency of companies as well as taking into
consideration the will and expectations of their stakeholders.
It is basically a concept whereby companies decide voluntarily to contribute to a
better society and a cleaner environment. It is a concept whereby companies integrate social and
environmental concerns into their business operations and their interaction with their
stakeholders on a voluntary basis. It is represented by contributions undertaken by companies to
society through its business activities and social investment. CSR is also linked with the
principal of sustainability, which argues that enterprises should make decisions based not only on
financial factors such as profits or dividends, but also based on the immediate and long term
social and environmental consequences of their activities.
CSR is the responsibility of an organization for the impact of its decisions and
activities on society, the environment & its own prosperity known as the TRIPLE BOTTOM

LINE of people, planet and profit. Triple bottom line concept (3P) explains that in order to
sustain in the long run a corporation should pay attention to the following components:
People relates to fair & beneficial business practices towards labor, the community and region
where corporation conducts its business. Support from people (society) in business area is
needed for corporate sustainability. As an integral part with society, corporation needs to have
commitment in giving optimum benefit to the society.
Planet refers to sustainable environmental practices. There is a causal relationship between
corporations and planet. If corporations preserve their environment, environment will benefit
them. A triple bottom line Co. does not produce harmful or destructive products such as
weapons, toxic chemicals or batteries containing dangerous heavy metals.
Profit is the economic value created by the organization after deducting the cost of all inputs
including the cost of the capital tied up. It is the most important thing and also main objective of
every business. Profit can be increased by improving work management through process
simplification, by reducing inefficient activities, save processing and service time and usage of
material as efficient as possible.
CSR in India
India has a long rich history of close business involvement in social causes for national
development. In India, CSR is known from ancient time as social duty or charity, which through
Different ages is changing its nature in broader aspect, now generally known as CSR. From the
origin of business, which leads towards excess wealth, social and environmental issues have
deep roots in the history of business. India has had a long tradition of corporate philanthropy and
Industrial welfare has been put to practice since late 1800s. Historically, the philanthropy of
business people in India has resembled western philanthropy in being rooted in religious belief.
Business practices in the 1900s that could be termed socially responsible took different forms:
4

philanthropic donations to charity, service to the community, enhancing employee welfare and
promoting religious conduct. Corporations may give funds to charitable or educational
institutions and may argue for them as great humanitarian deeds, when in fact they are simply
trying to buy community good will. The ideology of CSR in the 1950s was primarily based on an
assumption of the obligation of business to society.
In initial years there was little documentation of social responsibility initiatives in India.
Since then there is a growing realization towards contribution to social activities globally with a
desire to improve the immediate environment (Shinde, 2005). It has also been found that to a
growing degree companies that pay genuine attention to the principles of socially responsible
behavior are also favored by the public and preferred for their goods and services. This has given
rise to the concept of CSR.
After Independence, JRD Tata who always laid a great deal of emphasis to go beyond
conducting themselves as honest citizens pointed out that there were many ways in which
industrial and business enterprises can contribute to public welfare beyond the scope of their
normal activities. He advised that apart from the obvious one of donating funds to good causes
which has been their normal practice for years; they could have used their own financial,
managerial and human resourced to provide task forces for undertaking direct relief and
reconstruction measures. Slowly, it began to be accepted, at least in theory that business had to
share a part of the social overhead costs of. Traditionally, it had discharged its responsibility to
society through benefactions for education, medical facilities, and scientific research among
other objects. The important change at that time was that industry accepted social responsibility
Vol. 2, No. 1 Global Business and Management Research: An International Journal 46 as part of
the management of the enterprise itself. The community development and social welfare program

of the premier Tata Company, Tata Iron and Steel Company was started the concepts of Social
Responsibility. (Gupta, 2007)
The term corporate social performance was first coined by Sethi (1975), expanded
by Carroll (1979), and then refined by Wartick and Cochran (1985).In Sethis 1975 three-level
model, the concept of corporate social performance was discussed, and distinctions made
between various corporate behaviors. Sethis three tiers were social obligation (a response to
legal and market constraints); social responsibility (congruent with societal norms); and social
responsiveness (adaptive, anticipatory and preventive) (Cochran, 2007).
The last decade of the twentieth century witnessed a swing away from charity and traditional
philanthropy towards more direct engagement of business in mainstream development and
concern for disadvantaged groups in the society. This has been driven both internally by
corporate will and externally by increased governmental and public expectations (Mohan, 2001).
This was evident from a sample survey conducted in 1984 reporting that of the amount
companies spent on social development, the largest sum 47 percent was spent through company
programs, 39 percent was given to outside organizations as aid and 14 percent was spent through
company trusts (Working Document of EU India CSR, 2001). In India as in the rest of the world
there is a growing realization that business cannot succeed in a society which fails. An ideal CSR
has both ethical and philosophical dimensions, particularly in India where there exists a wide gap
between sections of people in terms of income and standards as well as socio-economic status
(Bajpai, 2001).
According to Infosys founder, Narayan Murthy, social responsibility is to create
maximum shareholders value working under the circumstances, where it is fair to all its
stakeholders, workers, consumers, the community, government and the environment.

Commission of the European Communities 2001 stated that being socially responsible means not
only fulfilling legal expectations, but also going beyond compliance and investing more into
human capital, the environment and the relation with stakeholders(Bajpai, 2001). Over the time
four different models have emerged all of which can be found in India regarding corporate
responsibility
CODES & STANDARDS FOR CSR
1
1. Global Reporting Initiative (GRI): GRI has been addressing the need for standardized
approach to corporate sustainability reporting. In 2006, GRI published Version 3.0(G3) of its
Sustainability Reporting Guidelines emphasizing performance indicators, which contain a
separate section titled Human Rights with nine performance indicators. It is an international,
multi-stakeholder effort to create a common framework for voluntary reporting of the economic,
environmental and social impact of organizational activities. Its mission is to improve the
comparability and credibility of sustainability reporting worldwide.
2
2. UN Global Compact Initiative: Launched in 1999 by United Nations Secretary, Kofi Annan,
the Global Compact is a coalition of large businesses, trade unions, environmental and human
rights groups, brought together to share a dialogue on corporate social responsibility. It consists
of a minimum platform based on fundamental values for disseminating good corporate practice
in accordance with universal principals. Companies adhesion is on a voluntary basis and
signatories commit to a global pact of nine principles.
1
3. Social Accountability 8000: SA 8000 standard for social accountability, created in 2000 by
Council on Economic Priorities Accreditation Agency (CEPAA). The SA 8000 code of practice is

broken down into nine key areas child labor, management systems, working hours,
compensation, disciplinary practices, forced labor, health & safety, freedom of association &
collective bargaining and discrimination.
2
4. International Organization for Standardization (ISO) 26000: ISO an International
Standard setting body has developed a new standard on Social Responsibility namely ISO 26000.
ISO 26000 is intended for use by all types of organizations and in all countries and to assist
organizations to operate in a socially responsible manner. According to ISO 26000, there are
seven fundamental subjects of CSR as follows:
3

Environment

Labor practices

Human rights

Organizational governance

Fair operating practice

Consumer issues

Social development

5. Occupational Health & Safety Advisory Services (OHSAS) Standard: OHSAS 18001 is
applicable to any organization which aims to establish a health and safety management system at
work.

6. Organization for Economic Co-operation and Development (OECD) guidelines for

multinational companies: OECD guidelines contains recommendations on core labor ,
environmental standards, human rights, competition, taxation, science and Technology

combating corruption and safe guarding, consumer rights. These guidelines acknowledge and
encourage the contribution that MNEs can make to local capacity building as a result of their
activities in local communities.

7. Others: ISO 9001:2000 (quality), ISO 14001:2004 (environment) and OHSAS 18001:2007
are generic management system standards, so that the same standard can be applied to any
organization, large or small, whatever its product or service, in any sector of activity, and
whether it is a business enterprise, a public administration, or a government department. These
standards have been developed in the above sequence, they appear to be compatible to each other
and hence show some overlapping features.

2. Review of Literature
According to Maon et. al. there arise the need of an integrative framework of Corporate Social
Responsibility design and implementation. The research proposed integrative framework for designing and implementing Corporate Social Responsibility awareness inside the organization,
assessing corporate purpose in a societal context, establishing a working definition and vision for
Corporate Social Responsibility status, developing an Corporate Social Responsibility strategic
plan, maintaining internal and external communication, evaluating Corporate Social
Responsibility related strategies and communication and institutionalizing Corporate Social
Responsibility policy.
Banerjee et al. suggests that environmental orientation is the recognition by managers about the
importance of environmental issues faced by their firms. Today CSR is emerging as a core focus
area for an increasing number of organizations, which are looking at new and innovative ways to
con-tribute to the communities they operate in .
Dean Roy Nash (2012) studied CSR: contributions of Maharatna Companies of India & found
out that the commitment that has been really made by these companies in the CSR area. The
Indian corporate sector is getting tough on CSR spending. It is more likely that CSR spending
will be made mandatory in the coming 2012 budget. The gap between public and private
companies with regard to CSR spending will be narrowed shortly. In this context the CSR
activities of all the Maharatna companies should be taken as an ideal example and motivator by
other corporate who wish to indulge sincerely in CSR activities of the country.
Shah, Bhaskar (2010), has taken a case study of public sector undertaking i.e. Bharat Petroleum
Corporation Ltd. in their research work.

10

The research has discussed that there is a broad relationship between the organization and
society. Organization has its existence only with the society. Organization used the
resources/inputs of the society like material and human etc. In reverse, the organization provides
services to the society. From the case study of the BPCL, it was found that company has taken a
lot of initiatives in order to serve the society.
Gahlot Sushmita (2013) studied Corporate Social Responsibility: Current Scenario and
concluded that the Clause 135 introduced by the Companies Act 2013 would go a long way in
strengthening the social initiatives taken by the companies. Apart from boosting transparency
and accountability, it would also open up the avenue for Corporate Social Responsibility
Consulting. However, steps are required to be taken to sort out issues of penalties in the event of
non-disclosure, scope of Schedule VII, internal controls etc. If the law is followed in true letter
and spirit, India Inc. would succeed in discharging its social responsibility in an effective and
efficient manner.

11

STATEMENT OF THE PROBLEM

From the past studied it has been found that the contribution on Corporate social responsibility
by the Indian companies is very less. The new legislation of Companies Act 2013 requires
certain class of companies to spend at least 2 % of their three year average annual net profit
towards CSR activities. It in this perspective the following study is undertaken to find out CSR
spending of the Indian companies.

12

Objectives of the study:

The objectives of this paper are:
1) To study the CSR spending of PSUs and Private Companies in India.
2) To study CSR after implementation of Companies Act 2013.
3) To study the transparency Score of top companies in India.

13

Research Methodology
Research Design:
The descriptive research design is used for this study.

Sources of Data:
The sources of data are secondary data which are collected through journals, articles, and annual
report.

Sampling Units:
For analyzing the corporate spending on CSR, data from a sample of 5 Maharatna PSUs, 16
Navaratna PSUs, top 10 Private Companies is collected and 25 top companies among top 100
companies in India is chosen.

14

Data Analysis
Spending Performance of PSUs on CSR:
Table - 1
Table Showing Allocation and Utilization of CSR Fund By Maharatna CPSES in India
Sl.
No.

Name of the CPSE

Year

Total funds
allocated for
CSR
(Rs.Crore )

% of Profit
After Tax
(PAT) of
previous year

Funds
utilized for
CSR (Rs.
Crore )

% age of
Funds
actually
spend

Coal India Ltd.

(CIL)

43.81
262.28
553.33

2.11
2.73
5.09

40.14
152.33
77.33

91.62
58.07
13.97

Indian Oil
Corporation Ltd.
(IOCL)

37.69
131.11
953.60

1.28
1.28
1.28

46.85
128.41
820.73

124.30
97.94
86.06

National Thermal
Power Corporation
Ltd. (NTPCL)

16.74
72.37
45.52

0.20
0.83
0.50

20.40
72.21
49.43

121.86
99.77
108.58

Oil and Natural Gas

Corporation Ltd.
(ONGC)

322.52
335.35
378.48

2.0
2.0
2.0

268.87
219.03
121.08

83.36
65.31
31.99

Steel Authority of
India Ltd.(SAIL)

200910
201011
201112
200910
201011
201112
200910
201011
201112
200910
201011
201112
200910
201011
201112

80.00
94.00
64.00

1.30
1.39
1.30

78.79
68.95
61.25

98.48
73.35
95.70

Source: Press Information Bureau, Government of India, Ministry of Heavy Industries &
Public Enterprises & Lok Sabha Unstarred Question No. 2881 dated 14-3-2013
The above table shows that out of five Maharatna PSUs in India, four of them Coil India Ltd.,
Indian Oil Corporation, ONGC and SAIL could not able to fully utilize the funds earmarked
15

for CSR in the last fiscal year. During the same year CIL assigned an amount of Rs.553 Crore
but hardly spent about 13.97%. At the same time ONGC was allocated with Rs.378.48 Crore and
man-aged in spending only Rs.121.08 Crore. While Indian Oil Corporation could able to utilized
about 86% of the total budgeted amount, the figures for SAIL was not more than Rs.61.25 Crore
out of the total outlay of Rs.64 Crore for funding out in various CSR activities and initiatives. It
is important to note that NTPC surpassed the limit of allocated sum for carrying out CSR
activities in the last fiscal year. The company had allotted Rs.45.52 Crore and it spent around
Rs.49.43 Crore, which is a good and welcome trend for the corporate world.

Table - 2
Table showing allocation and utilization of CSR fund by Navaratna CPSES in India
Sl.
No.

Name of the
CPSE

Year

Total funds allocated

for CSR
(Rs.Crore )
2.59
2.74
2.25

% of Profit
After Tax
(PAT ) of
previous year
0.36
0.24
--

Funds
utilized for
CSR
(Rs.Crore )
2.59
2.08
2.36

% age of
Funds
actually
spend
100.00
75.91
104.88

Bharat
electronics
Limited

Bharat Heavy
Electricals
Limited

Bharat
Petroleum
Corporation
Limited

200910
201011
201112
200910
201011
201112
200910
201011
201112

3.14
21.55
30.05

0.1
0.5
0.5

6.01
4.30
4.87

191.40
19.95
16.20

14.72
22.00
7.73

2.0
1.43
0.5

14.2
18.23
7.76

96.46
82.86
100.38

16

GAIL (India )
Limited

200910
201011
201112

55.91
69.54
(including carry
forward amount of
financial year 200910)
82.77

2.0
2.0
2.0

45.78
63.91
54.43

81.88
91.90
65.76

Hindustan
Aeronautics
Limited

200910
201011
201112

No specific allocation
of money for CSR, as
CSR policy was
notified formally
during November
2010
5.00

-------

3.90
1.79
5.81

----116.20

Hindustan
Petroleum
Corporation
Limited

15.00
15.00
30.78

2.41
1.54
2.00

13.84
20.10
26.54

92.26
134.00
86.22

Mahanagar
Telephone
Nigam Limited

200910
201011
201112
200910
201011
201112

Since MTNL is in
losses, no specific
allotment is made
under CSR Head

-------

-------

-------

National
Aluminum
Company
Limited

NDMD Limited

200910
201011
201112
200910
201011
201112

12.72
26.77
34.22

1.00
1.00
1.00

12.72
26.77
34.22

100.00
100.00
100.00

80.00
81.56
80.13

1.90
1.80
0.57

83.07
62.23
86.72

103.83
76.29
108.22

17

10

Neyveli Lignite
Corporation
Limited

11

Oil India Limited

12

Power Finance
Corporation
Limited

1
3

Power Grid
Corporation
Limited

1
4

Rashtriya Ispat
Nigam Limited

1
5

Rural
Electrification
Corporation
Limited

1
6

Shipping
Corporation of
India Limited

200910
201011
201112
200910
201011
201112
200910
201011
201112

200910
201011
201112
200910
201011
201112
200910
201011
201112
200910
201011
201112

5.90
12.47
13.00

0.72
1.00
1.00

8.19
13.23
16.14

138.81
106.09
124.15

20.00
25.00
50.00

0.95
0.95
2.00

24.12
29.42
50.19

120.60
117.68
100.38

Nil
11.89
13.24

-------

--8.91
13.27

----74.93
100.22

12.67
20.41
13.48

0.75
1.00
1.00

4.31
16.58
24.93

34.01
81.23
184.9
4

12.75
15.40
12.00

0.95
2.00
1.82

9.37
11.73
10.62

73.49
76.16
88.50

3.18
5.10
12.85

0.25
0.25
0.50

0.31
1.38
12.99

09.74
27.05
101.0
8

9.41
3.77
5.67

1.00
1.00
1.00

2.03
5.84 including
the balance carry
forwarded from
the previous year
5.84

21.57
154.9
0
102.9
9

18

Source: Press Information Bureau, Government of India, Ministry of Heavy Industries &
Public Enterprises & Lok Sabha Unstarred Question No. 2881 dated 14-3-2013
The above table shows that how 16 Navaratna PSUs accommodates the CSR activities in In-dia.
Out of 16 Navaratna PSUs in India, four of them BHEL, GAIL, Hindustan Petroleum and RINL
are found to lag behind in utilizing the CSR fund earmarked for them. However, the other five
Navaratna PSUs - Bharath Petroleum, National Aluminium Company, Oil India, PFC and Rural
Electrifi-cation Corporation have been able to fully utilize those funds during the year 2011
12. The other six Navaratna Companies - Bharat Electronics Ltd., Hindustan Aeronautics,
NMDC, Neyveli Lignite Corp, Power Grid and Shipping Corporation have done exceptionally
well and have even surpassed the allocated amount during the same financial year. However,
MTNL which is a loss making unit was completely away from the CSR activities.
Table 3
Table showing CSR rank in allocation and utilization of CSR fund by top Private Sector Corporate
In India
Name
of
Company

the

PAT
201112

CSR Spend
2011-12

2% of PAT % age over 2% of PAT CSR

2011-12
Actually spent
Rank

Tata Steel
Larsen & Toubro

53,898
44,565

1,460
700

1,078
891

135.43
78.56

1
2

Reliance Industries

197,24
0
33,970

2,880

3,945

73.00

280

679

41.23

42,954

330

859

38.41

&

28,790

220

576

38.19

Maruti Suzuki Ltd.

16,352

120

327

36.69

TCS

104,13
5
76,429
135,16

2,083

24.48

1,529
2,703

15.69
05.54

9
10

Hindalco
Industries
Bharati Airtel
Mahindra
Mahindra Ltd.

ICICI Bank
Tata Motors

240
150

19

Total

5
733,49
8

6,890

14,670

46.96

--

Source: CSR 10 India Index 2012, Anup Tiwari & Shweta Shukla, www.fundraising
india.org: May 2013,p-2.
The above table shows that out of the top 10 top private sector corporate, Tata Steel is the on-ly
one that has a CSR spend of more than 2% of its profit-after tax, all others have to still ramp-up
their act. It is also interesting to see a Tata company leading the ranking and another languishing
at the bottom. Larsen and Toubro seem to be quite close to the mark in terms of percentage and
even the amount of increase it needs to make in the coming years is not very high. Reliance
Industries has a relatively high percentage, however in coming years it may need to increase its
CSR spending by around INR 1 billion. The last three in the table also include the two Tata
companies; figures for who mandate an increase in spend of whopping INR 4 billion as a
combine. ICICI Bank also needs to make serious plans for ramping up its CSR spends by more
than a billion Indian rupees.

CSR in Companies Act, 2013:

Recently, with the promulgation of the Companies Act made an attempt on part of the Indian
Government to foster corporate participation in growth, community participation and
institutional philanthropy. The new Companies Act has introduced statutory provisions for
responsible corporate governance in India Inc. in the form of CSR provisions.

CSR Provisions:
The Companies Act makes provision regarding CSR a mandatory legal requirement for India Inc.
which is to be determined by a financial threshold. A company in this provision refers to an
entity incorporated under the Companies Act or under the other previous company law.
20

A. Applicability:
As prescribed under the Companies Act, the company satisfying any of the following criteria has
to comply with the CSR provisions as stipulated under the Companies Act:
i. Net worth of INR 500 Crore or more (USD 83.33 Million); or
ii. Turnover of INR 100 Crore or more (USD 166.67 Million); or
iii. Net profit of INR 5 Crore (USD 0.83 Million) or more
B. Constitution of a CSR Committee:
The company which falls within the above criteria shall be required to constitute a Corporate
Social Responsibility Committee (Committee) of the Board consisting of a minimum of
three directors, out of which at least one director shall be an independent director.
C. Formulation of CSR Policy:
The Committee shall formulate and recommend to the Board a CSR Policy which shall
indicate the activities to be undertaken, recommend the amount of expenditure to be incurred on
the activities referred, and monitor the CSR Policy of the company from time to time. The Board,
after taking into account the recommendations made by the Committee, shall approve the CSR
policy for the company.
D. Allocation towards CSR:
The Board is required to ensure that the company spends, in every financial year, at least 2%
of the average net profits of the company made during the three immediately preceding
financial years, in pursuance of its CSR Policy.
E. Disclosure and Reporting:
The Board is required to provide in the General Meeting a report disclosing the composition of
the Committee along with the details about the CSR policy developed. The contents of the

21

policy shall also be placed on the companys website. Further, the statement of profit and loss
shall record the amount of expenditure incurred on CSR activities.
F. Reasons for Non-Spending:
The CSR provision follows a comply or explain approach, which requires the company to
formulate a CSR policy and furnish details of spending of such amount. If the company does not
have adequate profit or is not in a position to spend the prescribed amount on CSR, the Board is
required to disclose and report the specific reasons for not spending the amount.
G. Penalty for Non-Disclosure:
Failure to report CSR spending or the reasons for its non-expenditure shall amount to
contravention of Section 134 of the Companies Act, and the company shall be punishable with
fine which shall not be less than INR fifty thousand rupees (USD seven hundred seventy-six )
but which may ex-tend to INR 2.5 Million (USD 38780 approximately ) and every officer of the
company who is in default shall be punishable with imprisonment for a term which may extend
to three years or with fine which shall not be less than INR fifty thousand rupees (USD 775
approximately ) but which may extend to INR five lakh rupees (USD 7750 approximately ), or
both.

CSR Variance Score and CSR Variance Rank:

As a first step towards calculating CSR Variance Score and CSR Variance Rank the Profit
After-Tax figure for each company is taken from its Annual Report for 2011-12. From these
figures, mandated 2% amount is arrived at, which is then compared with the current CSR spends.
For 2011-12 the top 10 companies spent less than half of what is mandated in the proposed law
i.e., instead of INR 14.67 billion the overall spend was only INR 6.9 billion. As a combine the

22

top 10 companies returned a poor Variance Score of 53. This score is a representative of the
market and in coming years would indicate the relative movement in CSR spends. The individual
CSR Variance Scores of the companies and CSR Variance Ranks are in the table below. The
Profit After- Tax (PAT) and CSR spend amounts is in INR Millions.
Table- 4
The table showing the CSR Variance Score and CSR Variance Rank:
Name of the
PAT
CSR Spend
2% of PAT
Variance Variance
Company
20112011-12
2011-12
%
12
Tata Steel
53,898
1,460
1,078
382
+35.4
Larsen & Toubro
44,565
700
891
-191
-21.5

CSR Variance
Rank
1
2

Reliance
Industries
Hindalco
Industries
Bharati Airtel

197,240

2,880

3,945

-1065

-27.0

33,970

280

679

-399

-58.8

42,954

330

859

-529

-61.6

Mahindra &
Mahindra Ltd.

28,790

220

576

-356

-61.8

Maruti Suzuki
Ltd.
TCS
ICICI Bank
Tata Motors
Total

16,352

120

327

-207

-63.3

104,135
76,429
135,165
733,498

510
240
150
6,890

2,083
1,529
2,703
14,670

-1,573
-1,289
-2,553
-7,780

75.5
84.3
-94.5

8
9
10
53.0

Source: CSR Variance Score and CSR Variance Rank

In the top 10, Tata Steel is the only one that has a CSR spend of more than 2% of its profit-aftertax (PAT). All others have to still ramp-up their act. It is also interesting to see a Tata Company
leading the ranking and another languishing at the bottom. Larsen and Toubro seem to be quite
close to the mark in terms of percentage and even the amount of increase it needs to make in the
coming years is not very high. Reliance Industries has a relatively high percentage, however in
coming years it may need to increase its CSR spending by around INR 1 billion. The last three in
the table also include the two Tata companies; figures for who mandate an increase in spend of

23

whopping INR 4 billion as a combine. ICICI Bank also needs to make serious plans for ramping
up its CSR spends by more than a billion Indian rupees.

Transparency score of top 25 companies

Sl.
No
.

1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17

Table 5
Table showing the CSR Transparency Score of top 25 companies in India
Company
CSR
CSR
CSR InActivities BRR
Transparency
Strategy Amount/ formation for the
Release
Score
disclosed %
available
year
d
disclosed on Webdisclosed
site
Indian Oil
Corporation
Reliance
Industries
Bharat
Petroleum
Corporation
Hindustan
Petroleum
Corporation
State Bank of
India
TATA Motors
Oil & Natural
Gas
Corporation
TATA Steel
Ltd.
Coal India Ltd.
Essar Oil
Hindalco
Industries
Bharati Airtel
Ltd.
Larson &
Toubro Ltd.
ICICI Bank
Ltd.
NTPC Ltd.
Mahindra &
Mahindra Ltd.
Mangalore
Refinery &
Petrochemicals
Ltd.

10

10

05

05

10

02
08

05

10
08
08

05

05

10

08

05

24

05

18
19
20
21
22
23
24
25

Tata
Consultancy
Services Ltd.
GAIL (India )
Ltd.
Bharat Heavy
Electricals Ltd.
Punjab
National Bank
Steel Authority
of India
Maruti Suzuki
India Ltd.
HDFC Bank
Ltd.
Chennai
Petroleum
Corporation
Ltd.

10

02

05

10

08

08

07

08

Source: India CSR Report Social Research and Reform Foundation

The above table shows that TATA Motors and GAIL (India) Ltd. Scores very less Transparency
score i.e., 02. Bharat Petroleum Corporation, Hindustan Petroleum Corporation, TATA Steel Ltd.,
Bharati Airtel Ltd., Larson & Toubro Ltd., Mahindra & Mahindra Ltd., Mangalore Refinery &
Petrochemicals Ltd. and Bharat Heavy Electricals Ltd. scored 05 Transparency score; Oil &
Natural Gas Corporation, Essar Oil, Hindalco Industries, NTPC Ltd., Steel Authority of India,
Maruti Suzuki India Ltd., and Chennai Petroleum Corporation Ltd. scored 08 Transparency score
and the rest scored 10 Transparency score.

25

Findings
1) It is found that there is a need for creation of awareness about CSR among the private sector
corporate as to follow the guidelines.
2) As the public sector corporate are allocated fund for CSR as per the policy but it is the
measure question that they could not spend the entire fund for the Triple Bottom Line (TBL
viz., People, planet and profit).
3) Business solutions are often revealed with the smooth functioning of the philanthropic means.
The correlation between social performance and financial performance often originates CSR.
4) Corporate Philanthropy a result that creates charitable efforts to improve their competitive
context along with the quality of the business environment.
5) Most of the companies spend below 2% of Average PAT towards CSR activities.
6) Most of the companies scored less than 10 Transparency Score.
7) All the companies are to be motivated to spend at least 2% of Average PAT towards CSR
activities.
8) All the companies are motivated to disclose their spending on CSR activities.
9) The essence of the CSR lays on the investing part of the profit beyond business for the larger
good of the society.

26

References

1.

http://articles.economictimes.indiatimes.com/2011-02-18/news/28615641_1_csr-socialresponsibility-net-profit

2.

India CSR Report of Socio Research & Reform Foundation (NGO), August 2013.

3.

Dean Roy Nash CSR: contributions of Maharatna Companies of India (2012), Asian
Journal of Research in Business Economics and Management,Vol.2 Issue 4, April 2012.

4.

http://www.globalreporting.org/ReporitngFramework/SectorSupplements.