The Indian partner of CECP’s Global Exchange, Samhita Social Ventures, tracks sustainable development and the role business can play in facilitating social impact in India. CEO and Founder, Priya Naik, shares insights on developments in corporate social responsibility in India.
What are the key trends in corporate social responsibility in India?
Since 2013, corporate social responsibility (CSR) has been required for all companies with a net value of ₹5 billion (R1.16 billion, US$60.15 million). Companies must spend at least 2% of their net profit over the previous three years on CSR activities. Many companies were contributing to the development sector before the legislation was enacted.
Ministry of Corporate Affairs (MCA) data shows that CSR spending increased by 73% between 2016 and 2021. Nearly half of more than 20 000 companies mandated for CSR spending in financial year 2022 spent more than prescribed.
What progress has India made towards the SDGs, and how is business contributing?
India’s SDG ranking is 112 out of 166 countries, and its SDG Index score is 63.5, which places it in the ‘Limited progress’ category. Nevertheless, India is progressing towards SDG 1: Ending poverty, and SDG 12: Responsible consumption and production, and is showing moderate improvement towards other SDG goals.
Corporate giving across these goals, especially those related to health, education and ending poverty, has been significant. However, greater contributions towards green jobs and skills, climate action, and water and sanitation are needed.
What are the key focus areas of corporate giving in India?
Education and health received nearly 60% of CSR expenditure in 2021/22. This was followed by disaster relief and environment sustainability, with shares of 10% and 8% respectively. CSR activities in India have mainly focused on replicating proven intervention models. The emphasis has thus been on projects with trusted non-profit organisations without commensurate investment in people, processes, and systems within those organisations.
To what degree do Indian companies work with the government to address social issues?
Close linkage with government mechanisms and institutional strengthening is a consistent focus. CSR entities also participate in policy discourse with government stakeholders and multilateral organisations. Flagship programmes, such as the Gandhi Fellowship by Piramal Foundation, place their fellows in rural areas where they work closely with government officials. Increasingly, companies are realising that working with the government is essential for any initiative to be executed at scale.
Since publishing your March 2022 report ‘Women at Work in New India’, how have things changed for women?
Women in the workforce continue to face disproportionate challenges, including the burden of household work, societal norms and the gender pay gap. The proportion of women joining the workforce also needs to improve. The Indian Express reports that women’s entrepreneurship could increase India’s GDP by US$ 0.7 trillion by 2025. It is essential to provide women with skills, and access to market linkages and government schemes. At Samhita, we are bringing together government bodies, funding partners and implementing partners to create an enabling ecosystem for women to join the workforce and realise their entrepreneurial aspirations effectively.
How is Samhita working to support nano entrepreneurs?
In the wake of the pandemic, Samhita initiated the REVIVE Alliance, which brought together CSR foundations, philanthropic organisations and bilateral/multilateral aid agencies to support nano entrepreneurs. We have mobilised over US$20 million and supported more than 500 000 nano entrepreneurs. We are developing a collaboration with the public, private, philanthropic, financial and social sectors to provide a holistic solution for entrepreneurs, right from providing access to social security schemes and enabling skills (financial and digital literacy) to advanced trade-specific skills, access to credit and market linkages.
Have any notable policy or regulatory changes affected CSR, and how are they affecting Indian companies?
The MCA amended provisions to ensure that a minimum of ₹5 million is devoted to impact assessment of a particular class of projects for select large corporates, ensuring greater accountability, transparency and learning on what works and what doesn’t.
The Reserve Bank of India (RBI) has suggested amending CSR regulations to enable a green transition across the country. Current CSR rules allow projects only up to three years, and CSR spending is concentrated in a few prosperous states. The RBI has highlighted the need for more geographical diversification of funds to lesser-developed states to accelerate the green transition.
How do you think Indian CSR will evolve in the future?
Over the last few years, Samhita has changed the discourse on CSR spend from being compliant to catalytic. We have been championing the use of blended finance instruments such as returnable grants, creating collaborations across sectors to have a network effect and building the capacity of development organisations by investing in technology and talent.
Contributor: Priya Naik
CEO and Founder
Samhita Social Ventures
priya@samhita.org
https://samhita.org
Source: The original version of this article was published in the Trialogue Business in Society Handbook 2023 (26th edition).
