Home / Industry / Infotech /  IT firms’ CSR spend may triple in 2 years

Mumbai: India’s technology companies may triple their spending in corporate social responsibility (CSR) work over the next two years, said Ganesh Natarajan, who heads the social development arm of software industry body Nasscom.

“The sector currently spends an estimated 2,500 crore towards CSR and that is likely to increase to 8, 000 crore in the next two years," said Natarajan of Nasscom Foundation, in an interview at the annual Nasscom Leadership Forum 2015.

Among information technology (IT) companies, the expected increase is likely to benefit the National Digital Literacy Mission (NDLM), said Natarajan.

The Nasscom Foundation has entered into a partnership with the Union government to promote digital literacy. The foundation has committed to train and certify 100,000 of the 1 million people who are expected to be made digitally literate by March, in the first phase of the mission.

So far, about 40,000 people have been trained and certified, said Natarajan.

Even though the government encourages companies to collaborate on CSR, few instances of such collaboration have been recorded, say industry observers.

The IT industry is, however, looking to collaborate on the digital literacy mission. In the last four months, the Nasscom Foundation has roped in five non-governmental organizations (NGOs) and seven companies including Cognizant Technology Solutions Pvt. Ltd, Capgemini India Pvt. Ltd, Cyient Ltd, Zensar Technologies Ltd, Infosys BPO Ltd and Amdocs Ltd for faster implementation of this programme.

The foundation expects to have 100 corporations invest 15 lakh each in this mission by end of 2015.

“It is an ambitious target. But we have approached about 200 companies already, and are in discussions with them," said Shrikant Sinha, chief executive of the Nasscom Foundation.

“We expect 30% of the 2% CSR spend coming in for the NDLM," said Natarajan, who is also the chief executive of Zensar. He also said that Zensar will triple its contribution to NDLM to 75 lakh in fiscal 2016.

Even though the IT-BPM (business process management) sector accounts for 9.5% of gross domestic product (GDP), 38% of service exports and employs 3.5 million people, according to Nasscom, it is often seen as a low-spender when it comes to CSR.

At a workshop in May 2014, Sourav Mukherji, dean, programmes, Indian Institute of Management (IIM) Bangalore, had said the IT and communication sector recorded the lowest CSR spending of about 0.3% to 1.5% (of profits) (fiscal 2014) because “they neither employ the under-privileged nor have a clear notification on CSR spends from the government".

However, Natarajan points out that IT companies’ CSR contribution through employee volunteering programmes are not accounted for in the CSR spend. Such programmes have been a major mode of donation across technology companies with about 83% of the top 100 IT companies using these programmes (the time employees spend on CSR is considered as CSR expense by companies) to carry out CSR, according to a report released by Nasscom and Boston Consulting Group on Thursday. “If that is monetized, IT would be among the top CSR spenders," Natarajan said.

He believes businesses also benefit from engaging employees though CSR. “At Zensar we saw that attrition among those who engaged in CSR was 8% while overall attrition was 11.4% during last fiscal. So it makes commercial sense," he said.

More than 50% of IT companies have formed their own foundations through which they carry out their CSR activities. Almost all companies are doing work towards promoting education or vocational skills, said the report.

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