The pandemic has not only thrown on us a large number of socio-economic complexities — but the issues emerging in the post-pandemic period cannot be likewise disregarded.
COVID-19 has not only exposed the inadequacies of the global healthcare system, but the measures taken to mitigate the outbreak have aggravated the prevailing tensions of the world economy. To respond to the immediate health crisis that has also resulted in a humanitarian crisis, the Government of India (GoI) needed substantial funding. Given the predicament, it was also imperative for the government to account for the severity of the pandemic that remains unknown; as it is mainly dependent on variable factors such as duration. Re-orienting the existing funds and programmes was not sufficient, it was essential to explore ways to tap into private finance. To this end, a COVID-19 dedicated PM CARES Fund was established. Among conversations on the PM CARES Fund and the ₹20,00,000 crore stimulus under the Atma Nirbhar Bharat Abhiyan, the role of the private sector in COVID-19 response through its Corporate Social Responsibility (CSR) is overlooked.
On 23 March 2020, the Ministry of Corporate Affairs issued a notice stating that diverting CSR funds towards COVID-19 relief is eligible under CSR. Additionally, on 28 March, the Ministry of Corporate Affairs issued a circular making it clear that — “Contribution to PM CARES Fund are eligible CSR activity under item no. (viii) of the Schedule VII of Companies Act, 2013.” This step accelerated the speed and scale of CSR response to the COVID-19 outbreak in an unprecedented manner. Companies Act 2013 has made it mandatory for companies with an annual turnover of more than ₹1,000 crore to spend two percent of its annual average net profit during the next three financial years as a part of its CSR policy. Corporate India donated approximately ₹5,324 crores to PM CARES Fund as a part of their CSR activity. Apart from this, approximately ₹2,529 crore has been allocated to undertake measures to support vulnerable communities, front-line workers, employee welfare, healthcare system as well as the efforts undertaken by the Central government. ₹9 crore has been donated to several NGOs working towards COVID-19 relief. This suggests that out of the annual average spending on CSR (₹15,000 crore), more than half has already been mobilised towards India’s COVID-19 response and preparedness.
CSR response by few of India’s top companies*
|< lang="en-US">Largest meal distribution program in the country, "Mission Anna Seva" – Distributed more than 50 million meals and ration kits in 75 districts across 16 states and 1 UT SevenHills Hospital - A 100-bed designated COVID-19 hospital set up with BMC Free fuel for approximately 14,400 emergency vehicles across 249 districts in 20 states Production of more than one lakh PPEs and masks a day₹500 crores to PM CARES Fund ₹46 crores towards various other COVID-19 relief funds
|Indian Oil Corporation
|Medical insurance for 3.23 lakhs pump attendants, delivery boys, drivers of LPG, and POL at ₹22.68 crores for one year; this amount assured ₹1 lakh per family of 4 for any COVID related treatment. ₹225 crores to PM-CARES Fund
|Oil & Natural Gas Corporation
|35 projects worth ₹4.59 crore are being implemented at various work centers of ONGC. Further, 13 projects worth ₹1.02 crore are awaiting approval. ₹300 crore to the PM CARES Fund
|State Bank of India
|₹30 crores for COVID-19 relief programs across India like — food relief, strengthening healthcare infrastructure, capacity building of healthcare workers, and supporting COVID-19 related research projects in partnership with IISc.
|Distributed essential items and supplies to the communities on ground-zero and the lower social section of the society which is most impacted by the lockdown. Initiative to ramp up the production of protective gear and medical kits. Education on preventive measures to halt the spread of the virus.
|Tata Steel Foundation
|A ten-point #CombatCovid19 CSR programme such as #ThoughtforFood, #FromtheFarm, #StitchinTime, #StrongerTogether
|Working towards the well-being of its employees by distributing more than 3 lakh masks among nine sister companies, installed a sanitising chamber in one of the coal fields, sanitising residential colonies, camps of contractors, and nearby villages.
|Tata Consultancy Services
|Providing COVID-19 patient trackers, health kits, ventilators for the poor persons. TCS iON digital classroom software that will empower students as we shift towards e-learning.
|Larsen & Toubro
|Budgeted ₹500 crores/month as wages to support the well-being of 1,60,000 contract workers. Additionally, provision of food and basic amenities at their labour camps. Several welfare initiatives are also taken up for their employees. ₹150 crore to the PM-CARES Fund
|Provided over 2.13 lakh surgical masks, over 40,000 N95 masks, 20,000 liters of sanitisers, 16,000 gloves, 5,300 personal protection equipment (PPE) suits, 2,600 protective eye gear and equipment like 50 thermal scanners and 3 non-invasive category ventilators to several state departments and hospitals. ₹80 crore to PM-CARES Fund
|₹150 crore to PM-CARES Fund
|Mahindra & Mahindra
|Offered to convert Mahindra Resorts into care facilities for Covid-19 patients Mahindra Foundation’s CSR vertical is working towards creating a fund to support the stakeholders who are bearing the brunt of the economic turmoil due to the lockdown including small businesses and self-employed individuals.
|NTPC Rihand distributed over 2,800 sacks of food grains and food items packets worth ₹17 lakh to the district administration to support underprivileged families. NTPC Vindhyachal committed ₹25 lakh as financial aid for relief measures to the Indian Red Cross Society, Singrauli. ₹257.5 crores to PM CARES Fund
|Partnered with the Ministry of Textiles to import 23 machines from China to manufacture PPE kits. Guaranteed 10 lakh meals for daily wage workers, feeding 50,000 stray dogs. Rural communities were distributed more than 100,000 masks, 15,500 soaps, and sanitisers. Aside from this, 200,000 N95 masks are being imported which will be given to the government. Collaborating with district hospitals and providing them with medicines, medical equipment, and disinfectant sprays. Supporting Apollo Hospital’s 24/7 helpline to educate on basic health information and guidance.
|Maruti Suzuki India
|Maruti Suzuki Joint Venture M/s Krishna Maruti is working towards manufacturing 1 million triple-ply masks for the Haryana government as well as Gujarat government.
*IllustrativeThe past few months have seen the participation of several other companies in different ways in the fight against COVID-19. For instance, ITC Ltd. has also set-up a contingency COVID-19 fund of ₹150 crore to provide financial assistance to the primary healthcare centers in rural India. While Infosys has contributed ₹500 crore towards providing testing kits, masks, ventilators, food for the poor, it has also partnered with Narayana Hospitals to provide a 100-bed quarantine facility. The Samhita Model, a one of its kind venture is working relentlessly in coordinating the efforts of corporate India’s CSR towards reducing the impact on the daily wage workers who have been severely impacted by the virus. They are working with the India Workers’ Alliance providing Direct Fund Transfers to beneficiary bank accounts, access to government schemes and loans. This pandemic has also put forth the need for technological intervention for measures to contain the spread, testing, R&D towards finding a cure, monitoring the effectiveness of the lockdown. To this end, Marico Innovation Foundation as a part of its CSR has offered a grant of ₹2.5 crore to startups towards the development of cost-effective ventilators, PPEs.
There was also a need to support the government’s efforts in increasing awareness among people about the precautionary measures such as social distancing. Several companies have adopted modified strategies such as transforming logos and changing advertisement slogans to communicate to the larger audience to follow the recommended approach. Amul has been actively participating in this fight by releasing a series of messages to convey the message showcasing the importance of the social transition during the pandemic. Amidst the crisis, an important step taken by the firms as a part of their CSR has been towards protecting the welfare and safety of its employees.
While CSR funds are already being utilised, there exists certain loopholes in the existing policies that act as barriers in the better utilisation of funds. A few areas to watch are:
1. CM Relief Fund: While contribution by companies to PM CARES Fund can be included as a part of their CSR activity, there is also a need to include the CM relief funds for the same as suggested by many state governments. State governments and local municipalities have played a bigger role in the fight against COVID-19. The uncertainty of the pandemic and the lack of funds has created a need for not only additional funding but also fast-track payment. Incentivising companies by bringing CM relief funds under Schedule VII of the Companies Act 2013 will ensure adequate funding towards pandemic prevention and control measures.
2. A more nuanced understanding in mobilising the CSR funds: Several organisations’ efforts in the fight against COVID-19 is bare minimum/none. Firstly, it is imperative to tap into their CSR funds to tackle the humanitarian crisis. Secondly, it is important to understand that greater need lies not within the public charitable trusts but NGOs at the grassroots who are aware of the bigger picture. The Samhita Model is one such example. These large corporations need to act locally using evidence-based expertise of NGOs that will help address the vulnerabilities faced.
3. The impact on social sector in the post-COVID-19 period: Recent studies focus on various industries and sectors being impacted due to COVID-19, the missing point is that talks on the social sector being hit in the post-COVID-19 period have not been initiated yet. The decline in the profitability of the companies in the coming year as well as the high CSR spending towards COVID-19 response will lead to an overall reduction in CSR funding. It is estimated that CSR spending will drop by 30-60% in the coming two years. The programs undertaken by the company’s CSR are often aligned with India’s Sustainable Development Agenda 2030. A decline in the overall CSR budgets, as well as deprioritising non-COVID projects, will push back the development agenda for a couple of years.
4. The need for government intervention: NGOs heavily dependent on the CSR funding will face a greater deficit in the funding — so much so that paying salaries of their employees will be uncertain. The government should step in and support the NGOs by giving salary and rent for three to six months.
It is estimated that the CSR spending on non-COVID-19 projects will be reduced by 30-50% in CSR spending towards non-COVID projects is foreseen. This suggests that there will be an increased gap in areas such as education, equality, environment. To bridge this divide, the Indian government should consider releasing the unspent corpus of ₹3,000 crore in CSR “savings.” NITI Aayog has already appealed for it to be released for mitigation strategies. Adopting structural and monetary measures and exploring ways in which they can support the NGOs working on non-COVID projects can be a step in this direction. The pandemic has not only thrown on us a large number of socio-economic complexities but the issues emerging in the post-pandemic period cannot be likewise disregarded. This will require a constructive involvement of the corporate India in enhancing the activities through its CSR policy to minimise the damage.
The views expressed above belong to the author(s). ORF research and analyses now available on Telegram! Click here to access our curated content — blogs, longforms and interviews.