The Covid-19 pandemic has led to an enormous amount of emergency CSR spending in the country. The nationwide lockdown imposed in order to contain the spread of the virus has led to a major blow to the country’s economy. Lack of employment opportunities, looming threat on existing jobs, labour crisis and the rising need for essentials like PPE kits and face masks needed immediate attention.
Balancing these issues, several organizations chose to dedicate a major portion of their CSR budget to help the country cope up from the Covid-19 pandemic. A recent study conducted by Crisil Foundation has revealed that more than 80 percent of the annual CSR budget in India has already been dedicated to address the pandemic and its after-effects, leading to an uneven CSR expenditure.
The study also revealed that the Covid-19 pandemic is likely to exhaust most of the CSR funds of the companies during the current fiscal since the country is struggling to safeguard its people along with the frontline workers. Moreover, investments are also required in research for discovering a cure or preventive treatments to defeat the virus.
As a part of their contributions in the fight against the virus, Indian firms have spent significantly in the form of donations to the PM CARES Fund and other relief funds set up to help control the situation. Additionally, the distribution of masks, food, personal protective equipment for healthcare workers, and provisions of relief material for those in need were also made to ensure the availability of essentials for all.
The CSR spending has continued to grow in the five years since it was mandated in the Companies Act, 2013. There have been companies who have spent more than the recommended amount and there have been companies which have failed to meet their targets. However, the growth in spending, as well as the involvement by corporates in national development, has been overwhelming.
However, the primary issue is that the CSR spending each year is focused on certain given sectors. These include education and skill development, healthcare, sanitation, and rural development. On the other hand, areas such as the national heritage conservation environment and sports are totally neglected by the companies. This uneven structure has led to the uneven development of the nation. Owing to the Covid-19 pandemic this year, the spending will be even more uneven, adding to this existing gap.