According to data available with the Union ministry of corporate affairs, India Inc. has utilised the highest share of its mandated Corporate Social Responsibility (CSR) fund in the education sector, followed by health and rural development between FY16-17 and FY20-21.
Key points
- During these five financial years, the education sector received Rs. 29,918 crore in CSR funds.
- The health sector received Rs. 2,0716 crore, and rural development and related schemes got Rs. 9,820 crore.
- In a reply to the Rajya Sabha, the corporate affairs ministry said, around 33% of the total CSR spent by the companies is in the states of Maharashtra, Karnataka, Gujarat, Andhra Pradesh and Tamil Nadu.
- Similarly, around 60% of the total CSR spent by the companies is in the areas of education, health care and rural development-related activities.
- While most companies prefer to spend their CSR funds in the state where they have their corporate hub or factories, corporate law allows companies to spend the money anywhere in India.
- A state’s share of CSR funds received also reflects the level of industrial activities in the state.
- Maharashtra, India’s biggest contributor to GDP, got the highest amount ( Rs. 15,000 crore) in CSR in the five year period. Karnataka got Rs. 5,922 crore, with Gujarat receiving Rs. 5,294crore.
- There are 29 heads under which the funds are distributed.
- Apart from education, health and rural development, setting up orphanages, slum area development, socio-economic inequalities, special education, Swachh Bharat kosh, technology incubators, and training to promote sport are among these.
CSR rules
- The amount under Corporate Social Responsibility (CSR) is allocated and utilised by various Companies in accordance with the broad framework provided by the Government under section 135 of the Companies Act, 2013 (‘Act’) and Companies (CSR policy) Rules, 2014, as amended from time to time.
- The Act stipulates that companies exceeding the threshold limits have to allocate at least 2% of their average net profits of the company made during the three immediately preceding financial years for CSR activities.
- CSR spending is mandatory for Indian companies with (i) a net worth of Rupees 500 crore or more; or (ii) a turnover of Rupees 1000 crore or more; or (iii) a net profit of Rupees 5 crore or more.
(Source: HT)
