The majority of the CSR activities being undertaken by the companies in India are focused at many common areas and have left many areas which have been left neglected.
Eleven areas were identified for CSR activities under the amended Companies Act, 2013. But apart from few of the areas, many others have not caught the attention of many of the Indian corporate houses. The Public Sector Units have performed sub optimally in comparison to many of the corporate entities with reference to their CSR spending. In such situations, it becomes pertinent to know about the important reasons and factors for sub optimal spending and lack of diversity in the CSR activities.
The current crisis is two pronged. The first crisis is sub optimal allocation and expenditure by various organizations including PSUs. This needs serious attention by all the corporate houses and PSUs. The second crisis is focused at the lack of diversity in the CSR activities. Six out of eleven areas designated for CSR expenditure have not received sufficient attention and allocation of funds. The government and the Corporates should collectively evolve a mechanism to ensure optimal allocation of CSR funds in the eleven designated area marked for CSR expenditure.
The government and the corporate should try and understand what are the major reasons why the corporates are not allocating funds for these six areas? One of the major reasons of sub optimal allocation of funds to these six areas is the dimension of impact assessment. It is very challenging to show impact assessment in case of providing training to the sportspersons preparing to play for international sports.
The best strategy would be to have a diversified approach in the process of strategic planning and implementation for the CSR domain area. The government must send quick signals to the CEOs from the PSUs to be ready for taking swift action in the domain of CSR by ensuring optimal allocation of funds for CSR activities and ensuring that the funds are being effectively utilized for the right cause ensuring the accomplishment of the desired impact in the society.
The diversified approach towards implementation of the CSR plans shall be the key to success as the needs of the society are diverse in nature and focusing on any one of the areas or sector shall leave the society at large untouched and uncared for.
I take this opportunity to urge the CSR professionals to adopt a diversified strategy having sufficient diversity in different areas so that we are able to touch various areas for different strata of the society to bring smiles going miles on the faces of different stakeholders.
By Rusen Kumar
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