CSR Spending Intensity in India’s Manufacturing Sector: An Analysis of CSR Expenditure as a Percentage of Net Profit

Abstract

The introduction of the Companies Act, 2013, which obliges corporations to adopt Corporate Social Responsibility (CSR) has transformed the CSR environment in India, and especially among profit making corporations. The paper will assess the level of CSR spending in India manufacturing industry by assessing CSR spending relative to net profit of the selected listed manufacturing firms in five years period between 2019-20 and 2023-24. The research follows quantitative, descriptive-analytical design based on secondary sources of annual disclosure of annual reports and CSR. Descriptive statistics and inferential statistics such as correlation and multiple regression analysis are used to evaluate CSR spending patterns, and also determine the important determinants of CSR spending intensity. The results indicate that the intensity of CSR spending has continually risen during the period of study and majority of the companies have also passed or slightly surpassed the benchmark as outlined in the statute. It is also revealed that firm size and profitability have a positive and significant effect on CSR spending intensity and the leverage has a negative impact. The paper finds that despite the improved minimum CSR participation in the production industry because of mandatory CSRs, firm-specific financial and structural variables are also essential in the question of the strangle of CSR spending.