IT companies contribute to CSR activities in a major way

Companies find it difficult to find proper implementation agency

GN Bureau | August 8, 2015


#csr   #infosys   #tcs   #akshaya patra  


Corporate social responsibility (CSR) rules were put in place in 2013. Four of the top IT services firms—Tata Consultancy Services Ltd (TCS), Wipro Ltd, Infosys Ltd and Tech Mahindra Ltd—spent Rs.642.7 crore in fiscal year 2014-15, the first year of implementation.

Infosys spent Rs.9 crore on CSR activities in fiscal year 2013-14, and scaled it up 26 times to Rs.239.5 crore in 2014-15, according to its annual report. It spent most of its budget on education, healthcare and addressing malnutrition, working with nearly 30 non-governmental organizations (NGOs).

With $8.7 billion in revenue, Infosys is much smaller in size than TCS, India’s largest IT company, which had sales of $15.5 billion in the year ended March 31. The company was able to scale up its funding by channelizing its funds mostly to large-scale institutions. For example, Akshaya Patra Foundation, the NGO that feeds schoolchildren, got the highest grant of Rs.36.8 crore. Institutions like the Indian Institute of Science and Chennai Mathematical Institute also benefited from Infosys’s CSR funds; they received Rs.21.2 crore and Rs.33.2 crore, respectively.

TCS spent Rs.220 crore, up from the Rs.93.6 crore it spent in 2013-14. The company has pledged to spend Rs.100 crore over the next few years to build toilets for girls in schools under the Swachh Bharat Abhiyaan. The CSR activities are carried through non-profit organaistion.

The activities include efforts to eradicate hunger, poverty and disease, promotion of education, gender equality and women’s empowerment, reduction of child mortality, and contributions to central and state government funds aimed at socio-economic betterment.

Preventive healthcare, sanitation, providing safe drinking water, protection of national heritage, rural development projects and measures to benefit Armed Forces’ veterans also count as CSR activities.

Most companies carry out their CSR activities through non-profit foundations. However, one of the challenge for the companies is to find NGOs that have the capacity to be able to accept the funds from corporate entities.

It is not a violation to not fulfil the 2% requirement as long as the company discloses why it did not meet the requirement. Even though Infosys was the highest spender, it did not completely meet the 2% target and was shy of it by around Rs.3 crore. TCS, too, saw as much as Rs.66 crore going unspent this fiscal year and met 1.5% of the requirement. Infosys said in its annual report that the unspent amount of Rs.3.46 crore was pending due to documentation and was spent in April 2015.

TCS said the amount was unspent because its toilet-building project for girl students in schools across the country is a multi-year project.

It is not a violation to not fulfil the 2% requirement as long as the company discloses why it did not meet the requirement.

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