Mumbai, Aug 24 (IANS): Spending on corporate social responsibility (CSR) in India has crossed the Rs 1 lakh crore milestone, just seven years after it was made mandatory, according to an analysis by CRISIL.

As much as 40 per cent of this is estimated to have been incurred in the past two fiscals as companies rolled up their sleeves to fight the Covid-19 pandemic that set in towards the fag-end of 2020 fiscal, an analysis by the the ratings agency showed.

As per the estimates based on the data disclosed in annual reports, overall CSR spending in fiscal 2020 stood at Rs 21,231 crore, with 1,387 listed companies accounting for Rs 14,431 crore (26 per cent more than in fiscal 2019), and 19,962 unlisted ones accounting for Rs 6,800 crore (7 per cent less than 2019 fiscal).

In the 2021 fiscal, again, assuming the spend was around the mandated mark of 2 per cent of average profit of the preceding three fiscals, eligible companies would have spent Rs 22,000 crore on CSR, including Rs 14,986 crore by more than 1,700 listed companies and Rs 7,072 crore by the unlisted entities.

While the actual spending for the two fiscals can be corroborated only once the annual reports for the last fiscal become available and are analysed in the coming months, one trend is clear: Covid-19 has gobbled up a chunk of the money.

Crisil undertook two separate exercises to say this with certainty, based on data sourced from company websites, public disclosures and articles/features on reliable websites, including top newspapers, business magazines and financial portals.

In the first exercise, it took the top 500 companies by CSR spending in fiscal 2020 and calculated their expenditure on Covid-19 relief since March 23, 2020, when it became eligible for CSR calculation. This showed them spending Rs 11,000 crore as of June 2021.

For the second exercise, the ratings agency considered the top 100 companies by revenue and by CSR spending in fiscal 2020.

Of these, 70 companies appeared in both the lists, while 60 appeared in only one, leaving 130 unique companies. These 130 have spent Rs 8,500 crore (including support through corporate groups) on Covid-19 across the two waves as of June 2021.

According to Maya Vengurlekar, Chief Operating Officer, CRISIL Foundation, "The successive waves of Covid-19 have been a litmus test of corporate altruism - with companies having to balance employee well-being initiatives, business imperatives and their social contract. Given the expectations of a third wave, the probability of diverting more funds during this fiscal seems imminent. Thus, it remains to be seen how long the momentum holds."

Among sectors, manufacturing, energy and financial services accounted for over 60 per cent of the spendings.

Public sector companies (accounting for 7 per cent of the total eligible companies) contributed 32 per cent of the total CSR spending, while private entities (accounting for 87 per cent of total eligible companies) spent 63 per cent.

In both, around two-thirds met the mandate of spending 2 per cent or more of their net profit for the preceding three fiscals. Also, in keeping with the recent trends, most companies preferred to implement their CSR mandate through non-governmental organisations or trusts.

Most of the money (53 per cent of total CSR spending) continued to flow towards education and skill development, and healthcare and sanitation, while rural development got 9 per cent. Yet, the cumulative spending into these three sectors was down to 61 per cent in fiscal 2020 from 75 per cent in fiscal 2019, as the pandemic spawned a change in priorities.

In fiscal 2021, the share of pandemic-related CSR spending is estimated to have climbed to 62 per cent, leaving little for other causes.