When India became the world’s first country to make corporate social responsibility spending mandatory it was expected to trigger a wave of development across the subcontinent.
Results are now rolling in for the first year companies had to spend 2 percent of their average net profit for the past three years on development projects under India’s Companies Act 2013 — so long as they were registered in India and met requirements like having a net worth of 5 billion rupees ($76 million), or turnover of 10 billion rupees.
Early analysis reveals most of the 16,500 odd companies required to spend on CSR fell short of the 2 percent target. Companies aren’t penalized for underspending but have to report why they did.