NGRBC Principle 8 — Inclusive Growth & Equitable Development

What Principle 8 covers

The National Guidelines on Responsible Business Conduct (NGRBC) were issued by the Ministry of Corporate Affairs in 2018 and form the backbone of SEBI’s Business Responsibility and Sustainability Report (BRSR) format. Of the nine NGRBC Principles, Principle 8 covers inclusive growth and equitable development.

In BRSR-format terms, Principle 8 covers inclusive growth through:

• Essential disclosures on social impact assessments, rehabilitation and resettlement, community grievances, MSME / small-producer sourcing, and the Job Creation in Smaller Towns BRSR Core KPI
• Leadership disclosures (for the Top 1,000 listed entities) on procurement from socially marginalised groups, social impact assessment of products and services, and CSR beneficiaries — with applicability judgement on scope where the indicator depends on entity-specific facts
• CSR remains a separate disclosure regime under Companies Act, 2013 Section 135 and is not part of Principle 8 itself

P8 is the social-dimension complement to P6 (Environment) and P3 (Wellbeing of Employees). Where P6 covers the entity’s environmental footprint and P3 covers its workforce, P8 covers the entity’s footprint on communities and the broader economy — who the entity affects through its operations, who it sources from, and where it hires from.

The contextual legal background includes Companies Act, 2013 Section 135 (CSR), Indian land-acquisition statutes (most prominently the Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013), environmental clearance regulations (most prominently the EIA Notification, 2006), and the Micro, Small and Medium Enterprises Development Act, 2006 (MSMED) for the MSME classification. These statutes are background for interpretation; the BRSR disclosures themselves are governed by the SEBI BRSR Format and the Industry Standards on Reporting of BRSR Core (December 2024 circular).

This page is the reference hub for Batchwise’s coverage of P8.

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The Essential indicators (mandatory for every BRSR filer)

The BRSR format Section C, Principle 8 Essential indicators cover the items below — illustrative paraphrases; the SEBI BRSR format itself is the authoritative source for the exact wording and reporting structure of each indicator:

• Social Impact Assessments (SIAs) of business activities — whether the entity has conducted SIAs (statutory under LARR / EIA Notification, or voluntary), with the methodology and outcomes disclosed
• Rehabilitation and resettlement (R&R) of project-affected families — coverage and outcomes for any communities affected by entity-driven land acquisition or displacement during the reporting period
• Mechanisms to receive and address community grievances — disclosure of the channels, accessibility, and how grievances are tracked and resolved
• Input materials sourced from MSMEs and small producers — the percentage of input material value sourced directly from MSMEs (per the MSMED Act definition) and from small producers; with the cohort definitions disclosed
• Job Creation in Smaller Towns — share of permanent employees and workers hired from smaller towns (this is where the BRSR Core KPI lives — see the dedicated spoke page when published)
• CSR projects in aspirational districts — disclosure of CSR projects undertaken in the Government of India’s “aspirational districts” framework

Several P8 disclosures (CSR project narrative, R&R coverage) cross-reference disclosures the entity makes elsewhere (Companies Act §135 CSR section of the annual report, project-specific disclosures). The BRSR P8 disclosure should reconcile to those source disclosures — see the CSR vs P8 section below.

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The Leadership indicators (Top 1,000 listed entities)

The Leadership indicators below are part of the BRSR format for the Top 1,000 listed entities, and voluntary for entities outside the Top 1,000.

None of these Leadership indicators is part of BRSR Core assurance scope — only the Job Creation in Smaller Towns Core KPI under P8 is. The Leadership disclosures form the qualitative narrative around the assured Core KPI but are not themselves attested in the signed BRSR Core opinion.

For several Leadership items, the entity must make an applicability judgement on scope before responding — the procurement-from-marginalised-groups disclosure depends on which suppliers the entity classifies as such; the social-impact assessment of products and services depends on which products / services the entity considers in scope. Where applicability or scope judgement is involved, the disclosure includes both the response and the documented basis for the applicability call — the basis itself is what makes the disclosure interpretable.

Leadership indicators (illustrative paraphrases):

1. Procurement from socially marginalised / vulnerable groups — % of input value sourced from suppliers belonging to marginalised groups, with the entity’s documented classification basis
2. Social impact assessment of products and services — beyond the Essential SIA on operations, this extends to the products / services themselves and their impact on consumers and communities
3. Beneficiaries of CSR projects — count and categorisation of beneficiaries from the entity’s CSR projects during the reporting period (with cross-reference to the §135 CSR disclosure)
4. Corrective actions on social-impact findings — actions taken in response to SIAs or community grievances, with outcomes

A “not applicable” against a Leadership indicator that involves applicability judgement should be substantiated in the entity’s documentation.

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The 1 BRSR Core KPI under P8

KPI	What it covers	Methodology page (when published)
Job Creation in Smaller Towns	Wages paid to persons employed in smaller towns (covering employees and workers, on a permanent or non-permanent / on-contract basis) as a percentage of total wage cost across all locations within India for the same scope. Locations are classified using the RBI system (rural, semi-urban, urban, metropolitan); the actual location of the job is what counts, not residence. The prescribed treatment of which RBI buckets feed the “smaller towns” set follows the BRSR Core taxonomy and the SEBI Industry Standards (December 2024 circular).	Job Creation in Smaller Towns

The dedicated spoke page (publishing next in the W3 cluster) covers the prescribed formula, the smaller-towns definition, the worked example, and the source-document evidence specific to this Core KPI.

For the assurance engagement that covers this KPI, see BRSR Core Assurance.

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Companies Act §135 CSR — separate from P8 disclosures

A common confusion in first-year BRSR filings: treating CSR spend disclosures and P8 inclusive-growth disclosures as the same thing. They are not. Two separate regimes that touch the same activities:

Aspect	Companies Act §135 CSR	BRSR Principle 8
Statutory basis	Companies Act, 2013 §135 + Schedule VII	SEBI BRSR Format under LODR Regulation 34(2)(f)
Applicability threshold	₹500 Cr net worth / ₹1,000 Cr turnover / ₹5 Cr net profit	Top 1,000 listed entities (full BRSR), Top 250 / Top 1,000 phases for BRSR Core assurance
Disclosure location	Dedicated CSR section in annual report; CSR-2 form filing with MCA	BRSR Section C, Principle 8 disclosures
Quantitative measure	2% of average net profit (CSR spend amount)	Various: SIA coverage, R&R coverage, MSME procurement %, smaller-town hiring %
Audit / assurance	Statutory audit of CSR spend; CSR-2 form verification by company secretary	BRSR Core reasonable assurance for Job Creation in Smaller Towns; remaining P8 disclosures not in BRSR Core scope

As a practical matter, CSR-funded initiatives may be referenced in P8 narratives — for example, a CSR-funded vocational training centre may appear as a CSR activity in the §135 disclosure and may also be referenced in the P8 Leadership indicator on beneficiaries of CSR projects. The cross-reference is fine; the CSR spend itself is disclosed under Section 135 and should not be double-counted in BRSR. The two regimes are independent — one is not a substitute for the other.

This separation is also the basis for the disclaimer on the Wellbeing Spend BRSR Core attribute page — CSR spend on employee welfare does not flow into the P3 wellbeing-spend numerator either.

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Source-document evidence

The full evidence-document inventory is on Document Evidence Requirements. For Principle 8 specifically:

Job Creation in Smaller Towns (the Core KPI)

• HR master records with location mapping — employee and worker counts by city tier (Tier-1, Tier-2, Tier-3) per the prescribed BRSR Core definition
• Hiring records — joiners during the year by city tier (for the share-of-hires reading of the KPI, depending on the prescribed formula)
• Workforce reconciliation — total permanent workforce reconciled to the Section A workforce table

Social Impact Assessments + R&R

• SIA reports — internal or third-party assessments conducted during the reporting year (statutory, where triggered, or voluntary)
• R&R records — applicable only where an actual land-acquisition or displacement event occurred during the reporting period: affected-families register, compensation paid, rehabilitation status, with cross-reference to the relevant statutory compliance documentation
• Land-acquisition documentation — for any acquisition during the year that triggered statutory SIA / R&R obligations under the applicable Indian land-acquisition statute

Community grievances

• Community-grievance log — chronological register of grievances received from non-employee/non-worker community members, with action taken
• Grievance-redressal channel disclosure — public-facing notice, contact mechanism, accessibility documentation

MSME procurement

• Vendor master with MSME registration mapping — flag for MSME-registered vendors per the MSMED Act, with the registration certificate retained as evidence of the classification
• Defined sourcing population — the entity’s documented boundary for “input materials sourced” (which categories of spend are in scope, direct vs indirect procurement, materiality threshold). The percentage is only interpretable when the sourcing-population definition is disclosed
• Purchase records broken by MSME vendor for the input-materials category being disclosed, reconciled to the defined sourcing population

CSR cross-reference

• CSR section of the annual report — full §135 disclosure, used as cross-reference for P8 Leadership disclosure on CSR beneficiaries
• CSR-2 form filing with MCA for the reporting year
• Project-level beneficiary records for CSR projects referenced in P8

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”Smaller towns” definition

The exact definition of “smaller towns” for the Job Creation Core KPI is prescribed by the BRSR Core taxonomy and the SEBI Industry Standards on Reporting of BRSR Core (December 2024 circular). Entities should follow the convention prescribed there and in the current MCA-published taxonomy, and disclose the basis applied alongside the figure.

The dedicated Job Creation in Smaller Towns spoke page (publishing next in the W3 cluster) covers the definition, the formula, and the worked example in detail.

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Sector context

Sector	P8 emphasis
Public infrastructure, utilities	R&R is often the headline indicator — large projects typically trigger statutory SIA and R&R obligations under LARR. Smaller-town hiring varies by project location.
Banking, NBFCs	Financial inclusion narrative through priority-sector lending, branch network in smaller towns, and direct beneficiary outreach. Smaller-town hiring is a strong indicator for the Core KPI.
FMCG, retail	Rural distribution networks; MSME procurement from packaging, contract manufacturing, and logistics partners. Smaller-town hiring through distribution / sales workforce.
Pharma, healthcare	Access to medicines, rural healthcare reach, beneficiary CSR programmes. SIAs typically tied to specific facility expansions or rural health initiatives.
IT services, BPO, KPO	Smaller-town hiring is often a headline narrative — many entities have established delivery centres outside the major metro cities. MSME procurement is light (limited goods-input).
Manufacturing, cement, steel	Land acquisition and R&R most material for greenfield or expansion projects. MSME procurement varies by sector. Smaller-town hiring through plant locations.

The sector-specific industry guides (in /industries/) cover the operational nuances per sector — those publish over Phase C Weeks 7-8.

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Common audit findings

Common practice patterns observed in BRSR engagements — not SEBI-recognised categories of finding:

1. Smaller-town definition not stated. The Job Creation KPI is reported as a percentage without disclosing the underlying definition of “smaller town” (which population threshold, which city-tier classification, which year’s notification). The denominator definition is what makes the percentage interpretable, and the basis should be disclosed.
2. MSME procurement boundary inconsistency. ”% of input materials sourced from MSMEs” can be measured at different boundaries — direct purchases only, or including indirect (through prime contractors). The boundary applied should be disclosed and held consistent.
3. MSME registration verification gap. Vendors flagged as MSMEs in the entity’s vendor master without retained MSMED registration certificates. The audit-trail for the MSME classification rests on the registration evidence; missing certificates create a verifiability gap.
4. CSR overlap with P8 not reconciled. The §135 CSR disclosure and the P8 leadership disclosure on CSR beneficiaries pull from the same project records but slice differently. Failing to reconcile (different beneficiary counts, different categorisations) is a routine cross-disclosure inconsistency.
5. SIA scope mixing statutory and voluntary. The BRSR P8 SIA disclosure asks about SIAs conducted; the disclosure should distinguish statutorily-triggered SIAs from voluntary SIAs (entity-initiated). The specific statutory triggers vary by Indian regime (most commonly land-acquisition and environmental clearance contexts) — the disclosure should reference the specific statute that triggered each SIA where applicable. Aggregating without distinction makes year-on-year comparability difficult.
6. R&R population definition undisclosed. ”% of project-affected families covered by R&R” is reported as a percentage without disclosing the underlying affected-population definition, the cut-off date, or the basis for “covered”. The basis should be disclosed alongside the figure.

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How P8 rolls up into the BRSR Core engagement

P8 carries one BRSR Core KPI — Job Creation in Smaller Towns — which the signed BRSR Core assurance report attests to reasonable assurance under SAE 3000 (Revised). Workpapers retained by the assurance partner cover the smaller-town classification basis, the HR master + hiring-record reconciliation, the workforce boundary alignment with the Section A table, and the cohort-scope consistency between numerator and denominator.

The remaining P8 disclosures (Essential indicators on SIAs, R&R, MSME procurement; all Leadership indicators) are filed as part of the BRSR but are NOT in the BRSR Core reasonable-assurance scope. Many entities ask the assurance partner to apply limited-assurance procedures over selected P8 items where lender ESG covenants reference them — common candidates: MSME procurement %, R&R coverage, CSR beneficiary counts.

For the engagement that produces the signed BRSR Core assurance opinion, see BRSR Core Assurance. For SME suppliers being asked by their Top-1,000 listed customer to provide assured smaller-town-hiring or MSME-status data as part of the customer’s value-chain disclosure, see BRSR Value Chain Verification.

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Related reading

• NGRBC Principle 3 — Wellbeing of Employees — sibling pillar (employee-side disclosures)
• NGRBC Principle 5 — Human Rights — sibling pillar (community grievance overlap with P8)
• NGRBC Principle 6 — Environment — sibling pillar
• Spend on Wellbeing as % of Revenue — P3 Core KPI; CSR overlap is disclaimed there as well
• Document Evidence Requirements — full per-attribute evidence checklist
• NGRBC to BRSR Metric Mapping — full P1–P9 to BRSR-format metric crosswalk
• BRSR Core Assurance — service
• BRSR Value Chain Verification — service