In its more than 75 years of independence, India has been able to change itself from a poor country to the world’s fifth-largest economy after the US, China, Japan, and Germany.  However, when it comes to human development a lot needs to be done as the country still stands at 132 in the list of 191 countries on the United Nations Human Development Index.

Atul Satija, founder of The Nudge, in a keynote on ‘Making giving bigger and better: Advancing Social Equity’ during the TechHR India 2023, spoke at large on the unequal distribution of CSR funding in India. He highlighted that the majority of the CSR work is limited to metropolitan cities like Mumbai, Pune, Bangalore, and Hyderabad.

“Most of the poverty within the developed states lies outside the metropolitan cities,” said Satija who is committed to giving away half his wealth to philanthropic causes through #LivingMyPromise pledge.

The CSR spending is concentrated with the rich states and this situation needs to be changed if we are ever to have a good society across the country. “We need to advance our social equity efforts to spread the benefits to far-flung areas of the country where industries have an almost negligible presence. Hence, the remote areas of the country are deprived of CSR initiatives,” he emphasised, adding that there is a need for wise utilisation of CSR funding in order to create a better society.

Highlighting the intersection of the corporate and social sectors and how the two could be the foundation for a better India, Satija explained that the non-profit sector has a huge role to play in advancing social equality, but very few in India ever get an opportunity to have exposure to it. “The situation is when a majority of us want to have a better society,” he added.

Individual companies must narrow their CSR focus

Section 135 of the Companies Act 2013 (Act), mandates that certain companies must allocate at least 2% of their average net profits from the preceding three financial years towards CSR activities. This provision applies to companies with a net worth of Rs. 500 crore or more, turnover of Rs. 1000 crore or more OR, net profit of Rs.5 crore or more.

But it does no good to just splash the money about without a clear objective. Therefore, Satija advised companies to be very diligent in deciding on their focus area to spend their CSR money. “They are needed to narrow down their choice of target social causes, locations, implementation channels among others, it helps to understand the problems better to deliver more in solving any problem related to the society for better outcome of their CSR spending,” he added.

In addition to narrowing down your social causes, it is equally important to understand that any problem can not be addressed in a short span of time. “Hence, companies must target a longer period of CSR spending towards a particular cause. One cannot completely eradicate it but a gradual attention towards a problem can bring a positive outcome,” he said.