CSR funds worth Rs 83.14 bn remained unspent over three financial years

Photo: Shutterstock

Corporate Social Responsibility (CSR) funds worth over Rs 83.14 billion remained unspent over three financial years starting from 2014-15, according to the government.

Under the Companies Act, a certain class of profitable entities is required to shell out at least two per cent of their three-year annual average net profit towards CSR activities in a financial year.

According to data provided by Corporate Affairs Minister Arun Jaitley in a written reply to the Rajya Sabha, the total unspent CSR funds stood at Rs 83.14 billion during the three financial years -- 2014-15, 2015-16 and 2016-17.

In 2014-15, the prescribed CSR amount was Rs 152.51 billion but Rs 51.85 billion remained unspent. In 2015-16, the figure was Rs 152 billion whereas Rs 8.89 billion was not spent, the data showed.

In 2016-17, the prescribed amount was Rs 157 billion, while Rs 22.38 billion remained unspent.

Jaitley said that whenever violation of CSR provisions is detected, the Registrar of Companies initiates penal action against the non-compliant entities after seeking sanction for prosecution from the ministry.

"For the financial year 2014-15, prosecution against 284 companies were sanctioned out of which 33 companies have filed application for compounding," he said.

The ministry has also set up a Centralised Scrutiny and Prosecution Mechanism in April this year for the financial year 2015-16 onwards on a pilot basis for enforcement of CSR provisions.

"Based on scrutiny, preliminary notices have been issued to 5,382 companies for financial year 2015-16," Jaitley said.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.

We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

Business Standard is now on Telegram.
For insightful reports and views on business, markets, politics and other issues, subscribe to our official Telegram channel