Though the spending has reached its meaning full proportions , there is a need to improve the quality and the impact of all that spends on the that ground . Capping the total CSR spend at 5 percent of the total money set aside for CSR needs to be relooked as firms have singled this out as a factor holding them back from enhancing their own in-house CSR capacities. Implementation entails multiple costs such as salaries of dedicated CSR staff, administrative overheads, establishment expenses, communication expenses, professional fees, statutory filing and related consultancy etc, which are difficult to keep within the 5 percent limit. There is also a case for ensuring robust due diligence before appointing an NGO/voluntary organisation partner by adding governance and impact achieved are two areas which need assessment.
An independent third-party evaluation like grading of the NGOs/implementing agencies should be considered to gauge a potential partners ability to drive the desired social impact.
According to a Survey a third of the 1,913 listed companies which qualify for CSR spends did not spend the money due to multiple reasons.As much as 341 said they were unable to spend because of reasons like:
- 1) A delay in identifying projects
- 2) Setting up the requisite in-house expertise
- 3) 45 did not report CSR activity
- 4) Annual reports for fiscal 2018 were not available for 118, and
- 5) 163 said they were not required to spend either because they did not meet the criteria or were loss-making
- 6) An additional Rs 2,380 crore would have been spent last fiscal had all the listed companies spent the stipulated 2 percent of profit.