An Insight into CSR Funds for Education By India's Top Companies

A four-decade-old school is run by an old couple in a remote village in Uttar Pradesh on personal savings and donations. During the lockdown, they had no option than discontinuing classes. Students did not have any laptops, tablets or smartphones. Teachers visited respective households, but the outcome was no match to the routine. Since then, they have been struggling to set up a computer centre. Government schemes come with their own set of challenges. They have heard of CSR funding but don’t know whom to approach. Which company will support them? How challenging will it be? Will they even consider a non-governmental school? Ritika Mahajan and Monica Sareen tried to explore some of these questions by analysing CSR reports of India’s top ten companies (based on market cap) from the last decade and interviewing experts. The article discusses their CSR budgets for education, significant projects, locations, governance, and associated challenges.

- Ritika Mahajan and Monica Sareen

The CSR Regulation

Section 135 of the Companies Act, 2013 mandates listed companies with a turnover of ₹5000 crore or a net worth of ₹500 crore or a net profit of ₹5 crore to constitute a CSR committee. This committee formulates and recommends the CSR policy to the Board. It includes spending at least 2 per cent of the last three years' average net profits on Schedule VII activities. Education is one of these activities.

The Ministry of Corporate Affairs, Government of India, suggested that Schedule VII must be “interpreted liberally.” But long-term projects rather than one-offevents are allowed, and expenditure on employees, routine business, statutory obligations or activities outside India does not qualify. The projects’ surplus is not profit. Simply, CSR includes charitable activities that meet social and/or environmental objectives. In May 2021, COVID-19 projects were added to the list.

Regulation’s Impact

Experts suggest the Act has been a game-changer. Dr Amit Kumar, Head of CSR Initiatives at TERI, said, “It was a huge, positive step that made companies proactive.” A study published in the Economic and Political Weekly based on firm-level data from 2010 to 2015 stated a “sharp spurt” in the number of firms spending on CSR after the Act; total spending also increased. Another study noted that CSR helped in moving towards the SDGs.

Top CSR Activities