The Companies Act 2013 has been a stimulus in jumpstarting
the contribution by the corporate world towards social impact through Corporate
Social Responsibility. Businesses are taking a strategic yet targeted approach
towards improving the education sector. They have been pushed to a responsible
role in the society and have a targeted vision in their corporate social
responsibility programs wanting to impact areas that have a correlation with
their own business goals. For many businesses, education is an important part
of their plans, since the needs exist in all geographic areas, across all
subject areas, and for all kinds of people. Though there are many private as
well as non-governmental organizations working towards the same cause, the
backbone of the education system in India still remains with the municipal
schools who in fact reach out to the maximum children in need. This research
paper is conducted to assess the impact of CSR funds on municipal school
education in India both quantitatively as well as qualitatively.
Corporate Social Responsibility – courtesy the Companies
Act, 2013 has the ability to catalyze the movement desperately needed for the
improvement of India’s school education system. One of the 10 approved areas
for CSR initiatives under the Schedule VII of the Act is “promoting education,
including special education and employment enhancing vocational skills,
especially among children, women, elderly, and the differently abled and
livelihood enhancement projects”. Even the UN under its Sustainable Goals initiative
has focused on Education as it’s 4th most priority.
The Municipal School System in India makes up for about 65%
of the schools providing education to approximately 259 million students,
employment to almost 57 million employees as teachers, headmasters and
administrative staff. Though it makes up for the backbone of the community, it
still lacks in creating the impact due to insufficient funds, lack of planning,
poor administration and lax execution.
With the implementation of the Companies Act 2013, companies
are required to spend 2% of their average net profit over the three preceding
years on CSR which can go a long way in bridging the gap between and contribute
to creating an India which houses an excellent as well as an inclusive
education system. An increasing number of NGOs, Private Organizations,
Foundations and Companies collectively work towards bridging the gap found in
the municipal school education. But, deeper assessment has showcased a drop in
retention rates with more than 47 million children dropping out of before the
age of 15 according to the 2016 UNESCO Report. Not only that, 1 in 3 students
in The Impact of Corporate Social Responsibility on Municipal School Education
in India 4 municipal schools are malnourished while as more than 71 million
students turned to private tuitions to even be able to do basic arithmetic. In
addition, despite spending Rs. 586,085 crore ($94 billion) over the last decade
on primary education, India has been unable to arrest the decline in learning.
As the backbone of the education sector in India, Municipal
Schools have to focus on the development of its own module, teaching style,
impact assessments, infrastructure facilities and so on. The finance minister
outlaid a Rs. 79 crore budget for the education sector for 2017-18. With the
9.9% increase in government funding as well as a 20% increase in CSR funding,
the education sector has to gear towards an increase in its overall impact on
students in terms of enrollment, retention and pass rates. It should also aim
to increase its HDI-Education Index and be able to cater world class education
affordable by the majority of the Indian population.
The municipal education system is also heavily bogged down
by bureaucracy which shadows the efforts of many able teachers, headmasters and
schools as a whole. There is little to no transparency regarding
implementation, execution and evaluation of various initiatives, funded by both
the government and other third-party organizations. There is also no account of
student progress from the time he/she has joined the system which in turn does
not allow for a thorough examination of the impact of the school education
system as well.
of the Study
1. To study the impact of funds that come in as CSR on the
quality of the education in municipal schools
2. To study the difference created by the plans and schemes started
by Companies involved in Municipal School Education
3. To study the impact by NGOs in Municipal School Education
4. To study the pillars involved to establish a relationship
between municipal schools and other non-governmental organizations and/or
5. To study the development in children through CSR projects
in Municipal School Education
Education was and still remains to be one of the most
favored sectors for contributions by major companies under the Corporate Social
Responsibility charter. Even before the mandatory Companies Act, 2013, the
education sector has always attracted funds from major powerhouses The Impact of Corporate Social Responsibility
on Municipal School Education in India 7 and continues to do so. Although there
has been a significant increase in funds, the relative impact has not been
The HDI – Education Index for India was 0.356 in 1980. Fast
forward to 2000, it increased to 0.472 and 0.617 in 2010 respectively. In 2013.
The index was clocked at 0.65. India ranks 92 in comparison to the other
countries of the world, coming behind countries like Philippines, Malaysia, Sri
Lanka and many more as per the Legatum Prosperity Index 2015. According to the EFA
Global Monitoring Report 2010 (UNESCO), India ranks 105 amongst 128, fighting alongside
African countries as well as Asian countries such as Bangladesh and Pakistan.
The country supports a male literacy rate of 82.14% and a female literacy rate
of 65.46% according to Census 2011.
The latest Annual Status of Education Report published in
January 2017 states a disappointing scenario with poor overall learning levels
in municipal schools across the nation. This in itself is a surprising find as
the investment in CSR initiatives has been on the rise.
In FY16, education received the highest amount of CSR
funding amongst all other social development activities allowed under the CSR
agenda. Approximately 920 National Stock Exchange-listed companies together
have spent close to Rs.2042 crore on education which is a huge increase when
compared to Rs.1570 crore invested in FY15 as reported by Prime Database.
CSR Rules require companies with a net worth of Rs 500 crore
and above or revenue of Rs1,000 crore and above or net profit of Rs5 crore and
above to spend 2% of their average net profit of the last three years on social
development, including sanitation, education and healthcare. The Impact of
Corporate Social Responsibility on Municipal School Education in India 8
An in-depth study of the annual reports reveal that the CSR funds
classified for the use of education is not exclusively being utilized for the
same cause. Many companies are using the funds to construct toilets under the
Swachh Bharat mission or provide infrastructure support. Much of the funds is
also being utilized for non-academic activities or for activities grouped under
Education is favored because it touches on various aspects
of many social problems as education has a considerable impact on standards of
living and the job opportunities that it opens up. But if the CSR funds are not
being used to improve the quality of education, then the purpose is lost.
The Michael and Susan Dell Foundation believes that the support
of firms should go beyond tuitions, books and building school infrastructure.
The firms should look into supporting organizations and municipal schools which
have clear learning outcome target which in turn is also easily measurable. The
annual report of ABB Ltd indicates that out of Rs 1.70 crore it spent on CSR in
the past fiscal year, Rs 78 lakh was allocated for ‘promoting education’.
The company has included activities such as purchase of shoes
worth Rs 43,000 for school children at Nashik Govardhan School in Maharashtra,
and building infrastructure and water proofing work at schools. The company has
also spent close to Rs. 64 lakhs on providing prefabricated toilets to 42
schools in Bihar. Similarly, Bharat Electronics Ltd over Rs 2.5 crore of its
CSR funds for the construction of classrooms and infrastructure facility
maintenance in educational institutions in Karnataka and almost Rs. 3.7 crore for
building toilets in schools across the state in FY16. The Impact of Corporate
Social Responsibility on Municipal School Education in India 9
Though these investments by the aforementioned companies are
towards essential facilities for the students, they do little to contribute
towards learning outcomes. The government has already started working towards
these issues under its Swachh Vidyalaya mission which only means that extra
funds need not go towards the same. Because companies have been categorizing
these investments as ‘promoting education’ there has been a high jump in CSR
funding which explains the gap between increase in funding and no relative
impact in the education sector.
With an increasing number of NGOs and private organizations
working in the education sector, impact has not been able to be assessed
consistently. The organizations are not able to work hand-in-hand with the
municipal schools which leads to a lot of discrepancies and leads to the ultimate
loss of learning borne by the students. An increased number of investments by companies
directly into NGOs or private organizations is not consistently tracked which
also leads to the aforementioned gap in the education sector. Even if direct
investments are catered into the municipal school system, there is no
consistent record of its utilization and ultimately the impact so created.
1. The government does not maintain any public record for
the amount of funds that are invested by companies in their CSR initiatives which
makes it difficult to keep a track of the money and assess its impact.
2. There is also no public record maintained by the
municipal schools of the funds that have been invested by NGOs and other
organizations in these schools.
3. It was found that either 2 or mostly no NGOs or other
private organizations work with a school, thus pointing out the fact that the
municipal schools are way more in number.
4. The overall development, is very restrictive and not
extensive, of the children.
5. It is preferred by the schools to work directly with the
companies as this grants them much more autonomy, transparency and judicial use
6. The Municipal Corporation’s CSR wing or other CSR
initiatives do not provide the schools enough funds.
7. It is preferred by the schools to receive direct investment
from companies in the form of funds rather than cash.
8. Majorly the funds inested in CSR by companies are used
for ‘Promoting Education’ and not towards actual learning.
9. There is no real-time assessment of the CSR initiatives
and their impact on the students either by the companies or by the government
1. The Municipal Corporations should cooperate with the state
to create a transparent process for funds to be invested by companies either
directly or indirectly through various Non-Government Organizations for the
development of the children.
2. An autonomous body or committee should be established by
the government to assess the CSR initiatives undertaken and the quality of
3. The faculty of the Municipal schools including the
Headmasters and/or the teachers should play a vital role in the planning,
creation and execution of the CSR initiatives undertaken.
4. The primary focus should be on investing in the actual
learning process instead of activities to promote education.
5. The Municipal schools should have a say in major decisions
taken by the Municipal Corporations for the greater good.
6. The Municipal schools should come up with an effective and
reliable system to assess the students in a collaborative effort with the
Municipal Corporations and the government to measure the difference made by the
7. The government should introduce consistent assessments to
evaluate the effectiveness of various CSR initiatives to utilize funds