Emerging India: CSR Funding Shifts to Tier-2 Cities

CSR funding in India is shifting from major metropolitan areas to emerging Tier-2 cities and industrial belts. The move aims to decentralize corporate philanthropy, with significant growth in funding towards these regions. However, equitable distribution remains limited, focusing more on less impoverished areas.

In India, Corporate Social Responsibility (CSR) funding is witnessing a significant geographic shift as philanthropy extends beyond the traditional metros into emerging Tier-2 cities and industrial zones. Sattva Consulting's annual State of CSR in India report highlights this trend, showing a notable 120% growth in CSR inflows to industrial hubs and a 55% increase in Tier-2 cities over the past three years.

The data reveals that while Tier-1 city districts still receive nearly 30% of total CSR funding, Tier-2 cities and industrial districts are seeing a rapid rise in their share. The move reflects a broader strategy among corporations to invest in regions where they operate, such as industrial clusters and smaller towns, according to Srikrishna Sridhar Murthy, CEO of Sattva Consulting. Despite this geographic diversification, the distribution of funds remains inequitable, with a large portion of CSR money directed towards areas with lower poverty rates.

The report also notes a tripling in CSR allocations to Aspirational Districts over the past decade, largely driven by private-sector participation in underdeveloped regions. Nevertheless, public-sector companies continue outpacing their private counterparts in channeling budgets towards these districts. The shift marks a deeper involvement in India's CSR landscape, aiming to decentralize developmental aid and foster local impact.

(With inputs from agencies.)