The India Bull Case

If there is a statistic that would make a case for investing in India, it is this.

India introduced the Corporate Social Responsibility (CSR) Law back in 2013. According to the law, any company making profits in excess of Rs 5 Crores (~$600,000) should put aside 2% of their profits towards CSR activities supporting social causes. The law leaves some leeway in terms of what the money is spent on and what impact it delivers.

Over the last decade, this law has opened up vast pools of capital for the organisations working in the development sector. HDFC Bank has the largest CSR Pool, which sits at close to Rs 1000 Crores (~$110 Million), which it gives away each year to various Non-Governmental Organisations (NGOs).

Source: CSR.GOV

The government publishes the stats every year, and these numbers can be analysed.

The interesting thing that I found in the stats is the steady growth of the outlay year on year. No company enjoys giving away money, and they would avoid it if they could. Despite the efforts of the best accountants, the CSR expenditure is rising at over 10% year on year.

To me, this is the strongest proxy for the India growth story. It also shows the strength of the underlying profit machines. Consistent and growing profits year after year.

If you are investing in an index fund in India, you need not be worried at all.