Blog
Team Social Xleration, 15th November 2022
Introduction
Since the passage of the corporate social responsibility (CSR) provisions under the Companies Act 2013 in the year 2014 by the Parliament, the CSR canvass in the country has been progressively expanding. This is an outcome of the Government of India allowing companies to invest their CSR funds in additional areas hitherto uncovered by the Schedule VII of the Companies Act 2013, which lists the various categories and activities under which the companies can invest their CSR grants. This is done to cover more areas that deserve attention and CSR funds as well as to provide further flexibility and clarity to companies to invest in other causes which may be of interest to them and have a better fit with their business goals.
Doors Open for CSR Funds to Public Incubators, Institutions, and Autonomous Bodies
An important development in this regard occurred in 2019, when the Government of India permitted businesses to spend CSR funds in publicly funded incubators as well as support engineering, scientific, and technology research at well-known institutions, and bodies. In this context, the Finance Minister, Ms. Nirmala Sitharaman on 20 September 2019 announced that “Now CSR two per cent fund can also be spent on incubators funded by Central or State Government or any agency or Public Sector Undertaking of Central or State Government, and making contributions to public funded Universities, IITs, National Laboratories and Autonomous Bodies (established under the auspices of ICAR, ICMR, CSIR, DAE, DRDO, DST, Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals”.
This is a significant boost for the nation’s research and development (R&D) efforts, which have historically represented less than one percent of GDP with less than half of investments coming from the private sector.
CSR Investments for Research and Startups at Public and Autonomous Setups
The effect of this amendment is visible with publicly funded incubators, major institutions, and bodies attracting CSR funds for various projects. One of the major institutions to benefit from this addition to Schedule VII is the Indian Institute of Technology (IIT) Madras, where more than 170 CSR-funded are currently being carried out. The number of CSR-funded projects in IIT Madras grew to 200 recently. Through various CSR programs, it has received Rs. 90 crores. The International Centre for Clean Water (ICCW) of the Institute is collaborating with an incubator firm, InnoDI Water Technologies, on a significant project that involves the use of the capacitive de-ionization method (CDI) to provide clean drinking water. CDI can replace the RO technology since it maintains vital minerals, saves 60 percent of the groundwater, and uses less energy. Through CSR funding from Indian Oil Corporation Limited (IOCL) and the National Stock Exchange Foundation (NSEF), the technology has been implemented in several locations in Tamil Nadu, Andhra Pradesh, Karnataka, Telangana, and West Bengal.
The Data Analytics Risk and Technology (DART) lab, founded in collaboration with American Express, a large multinational company, is another successful tech-funded CSR project of IIT Madras. After only one year of operation, the lab has already formed numerous international partnerships and provided funding for 12 research projects on topics like artificial intelligence with human partners, supply chain risk, cognitive science, and healthcare, among others.
This update in the CSR provision was appropriately utilized to support startups working on combating COVID-19, which upended the way the world functioned. In late 2020, six deep science startups at the Society for Innovation and Development (SID), Indian Institute of Science (IISc) received financial support under the CSR program of US-based conglomerate Honeywell. Three of the six startups were majorly involved in addressing the COVID-19 pandemic. One of these was Azooka Labs Private Limited, which was working on creating an easy-to-operate point-of-care diagnostic kit for testing COVID-19. It was also developing a safer and more stable viral transport medium. Protein Design Private Limited was another startup that created viral antigens based on protein biotechnology for COVID-19 vaccination and diagnostics. PathShodh Healthcare Private Limited was working to repurpose its technology for quick and precise COVID-19 diagnostics while also obviating the need for PCR machines.
In the same context, the AMD COVID-19 High Performance Compute Fund offers computing resources to committed researchers all across the world, advancing the understanding of illnesses like COVID-19 and the ability to react to them. To further this objective, AMD donated HPC resources worth 1.92 million USD to the Council of Scientific and Industrial Research (CSIR) 4th Paradigm Institute in India in 2021.
Among IITs, IIT Delhi is also drawing CSR investments through its Foundation for Innovation and Technology Transfer (FITT). The incubator at IIT Delhi has partnered with firms like Ericsson, a manufacturer of telecom equipment, Pfizer, a pharmaceutical company, and state-run Power Finance Corporation, Power System Operation Corporation (Posoco), and Goa Shipyard Ltd. to direct their CSR budgets toward innovative startups.
Conclusion
The premier institutions, autonomous bodies, and incubators in the country are hotbeds of talent and high research and development capabilities. In them, the corporates have readily available CSR investment platforms, which can play a transformative role in creating social impact in the country. This work also directly ties in with the global commitment that the country has made in form of Sustainable Development Goals. While there is no shortage of motivation to undertake effective research and development work at these premiere institutions and incubators to address social concerns, the CSR funds will ensure that the motivation and ideas do not fall by the wayside and covert into a reality for improved life quality of the citizens.