Corporate Social Responsibility (CSR) spending in the Northeast region of India was not as generous in the fiscal year 2021-2022 as it has been in the past.
The Northeast received just a 7.7% share of CSR funding, the second-lowest figure since mandatory CSR spending became a requirement in 2014-2015. At its peak in 2016-2017, the region received 10.1% of funding.
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Companies are required to spend 2% of their profits on CSR projects, with spending in Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura included in the analysis. The Northeast region of India was found to be the recipient of the lowest amount of funding, with Assam receiving the most at INR 319 crore in FY22. The other states received between INR 100-130 crore each, significantly less than the top five states that received over 35% of the total CSR spending of INR 14,558 crore.
The top five states by pre-pandemic economic size were Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, and Karnataka, and the amount spent on CSR in these states was INR 5,136.5 crore, compared to INR 1,125.8 crore in the Northeast. Although the amount spent has doubled over time, the share of allocation remains broadly similar.
The discrepancy in allocation has been noted in previous reports, with KPMG’s India’s CSR reporting survey 2019 report stating that states with more aspirational districts received a smaller share of funds than richer states. The issue may stem from the fact that most companies are located in commercial centers, such as Mumbai and Delhi, and these states consequently receive a higher share of CSR spending. The Northeast region, with a lower share of industry, is less able to tap into CSR funds for development goals.
A 2021 NITI Aayog report on the region’s development noted that “the manufacturing sector in the region has a small share of the net domestic product of states (except for Tripura) at below 20 per cent. For all the Northeastern Region (NER) states together, the secondary sector contributes just over 18 per cent to the income, while the primary sector contributes 31.4 per cent and the tertiary sector around 50 per cent.” The India Philanthropy Report 2024 from non-governmental organization Dasra and global consultancy Bain & Company observed that government spending is more evenly spread out and focused on need-based spending, with the government providing 32% of its social sector budget to six states with a net domestic product per capita of less than INR 1 lakh, compared to just 17% for CSR spending.
A breakdown of CSR spending showed that companies spent INR 5,884 crore on gaushalas (cowsheds) and other cow-related projects since FY15, with total spending in the Northeast region being INR 7,918 crore.
In conclusion, the Northeast region of India received a smaller share of CSR funding in the fiscal year 2021-2022 than it has in previous years, with Maharashtra, Tamil Nadu, Uttar Pradesh, Gujarat, and Karnataka receiving the majority of CSR funding. The discrepancy in allocation may stem from the fact that most companies are located in commercial centers, with the Northeast region having a lower share of industry. However, government spending is more evenly spread out and focused on need-based spending, providing an alternative approach to CSR spending.
