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Source: This post Impacts of Changes to CSR Reporting Rules has been created based on the article ‘The case of ‘missing’ numbers in CSR data’, published in Business Standard on 11th May 2024.
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News: Corporate social responsibility (CSR) spending by companies in India hit a record high of ₹15,524 crore in the financial year 2022-23. However, it has become increasingly difficult to track where companies are spending this CSR money.
What are the changes made to the CSR reporting system?
Companies are required to spend around 2% of their profits on CSR programs in areas like education, healthcare, sports, and technology incubators.
The government had earlier set up a CSR portal to provide granular data on CSR spending by listed and unlisted entities,
Detailed information on the sectors and locations that received CSR funding was available until 2021-22, but not for 2022-23.
In September 2022, the Ministry of Corporate Affairs allowed companies to make limited disclosures on their CSR spending. It led to many businesses to stop revealing detailed information.
Read More – Govt looks to ease compliance burden with new CSR disclosure rules
What are the Impacts of the changes introduced to CSR reporting by the government?
1) Private companies have not disclosed details on around 80% of their CSR spending, while public sector companies have not provided details on around 70% of their spending.
2) Out of the total CSR spending, less than ₹3,500 crore has detailed disclosures on allocations across different sectors and regions.
3) Limited information makes it challenging to analyze how CSR money is being distributed. As per Previous data, most CSR funds for improving living standards went to richer states where companies are typically located, like Maharashtra and Gujarat. While less developed states like Bihar received only a fraction of the spending.
Source: Business Standard
