Moa Jamir
North-East India continues to be one of the most neglected for Corporate Social Responsibility (CSR) spending over the years as affirmed by recent data provided in the Rajya Sabha by the Ministry of Corporate Affairs, Government of India (GoI).
While CSR expenditure of companies has been increasing over the years, the data indicated that the eight states of the North-East received only a small percentage of the total spending.
Take the figures for the last three financial years into consideration. In both 2018-19 and 2019-20, the percentages of CSR spending in the region were less than 2% of the total expenditures across the country.
At Rs 290 crore in 2018-19 and Rs 357.36 for 2019-20, out of total CSR spending of Rs 20,163.18 and Rs 24,863.84 respectively, the share of NE states was just 1.43% in both the financial years.
In 2020-21, the percentage fell to just 0.96 with the region receiving Rs 196.39 crore, out of the total Rs 20,360.25 crore CSR spending in India. While the full figure for 2020-21 is yet to be finalized, no drastic uptick is expected.
Again, the data has to be interpreted by taking into account the regional disparities within the NE states. For instance, out of the measly overall amount, Assam consistently received the lion’s share, with over 70% of the spending in recent years.
In 2020-21, out of Rs 196.39 crore CSR spending in the NE, Assam received Rs 150.78 crore or 76.77%, leaving just Rs 46.61 crore or a little over 23% for the 7 other States.
It is reflected in the dismal figures, particularly in Nagaland and Mizoram, the two most ignored, even among the already neglected NE States.
With a measly amount of Rs 2.98 crore out of total Rs 20,260.25 crore expenditure across India, Nagaland's share was just 0.1% of the CSR spending while it was even worse for Mizoram with even the absolute figure at mere Rs 0.49 crore, the lowest among the States/Union Territories in India.
However, before making any assertions, one also needs to contextualise the concept of CSR, defined by the United Nations Industrial Development Organization (UNIDO) as a business management concept “whereby companies integrate social and environmental concerns in their business operations and interactions with their stakeholders.” It is generally understood as being the way through which a company achieves a balance of economic, environmental and social imperatives, while simultaneously addressing the expectations of shareholders and stakeholders.
In India, as per the Ministry of Corporate Affairs, the concept of CSR is governed by Section 135 of the Companies Act, 2013. Section 135 (1) of the Act mandates “every company with a turnover of Rs. 1000 crore or more, or a net worth of Rs 500 crore or more, or a net profit of Rs 5 crore or more to spend at least two per cent of their average net profits earned during three immediately preceding financial years on CSR activities listed in Schedule VII of Companies Act, 2013.”
Accordingly, most CSR initiatives are primarily concentrated in the periphery or direct impact areas in which a company is located or operates.
One of the chief reasons for the low level of CSR activities in the NE states, except to some extent in Assam, thus could be attributed to the lack of industries and plants– home-grown or otherwise, while geopolitical factors also contribute significantly.
Despite these detrimental backgrounds, given the strategic as well as other geopolitical concerns, a relook into CSR spending is pertinent with a nudge and incentives from the Union Government. Moreover, if one looks at the case of CSR spending in Nagaland in 2020-21, most spendings were from the private sector. In this context, the State-owned Public Sector Undertakings have pivotal roles to play in correcting regional disparities, particularly from a developmental perspective, by undertaking pan-India initiatives. The region urgently needs more CSR initiatives by corporates, and it is a social responsibility.
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