Corporate Social Responsibility (CSR) funds worth over Rs 8,314 crore remained unspent over three financial years starting from 2014-15, according to the government.
Corporate Social Responsibility (CSR) funds worth over Rs 8,314 crore remained unspent over three financial years starting from 2014-15, according to the government. Under the Companies Act, certain class of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities in a financial year. As per data provided by Corporate Affairs Minister Arun Jaitley in a written reply to the Rajya Sabha, the total unspent CSR funds stood at Rs 8,314.08 crore during the three financial years — 2014-15, 2015-16 and 2016-17.
In 2014-15, the prescribed CSR amount was Rs 15,251.32 crore but Rs 5,185.39 crore remained unspent. In 2015-16, the figure was Rs 15,256.20 crore whereas Rs 889.91 crore was not spend, the data showed. In 2016-17, the prescribed amount was Rs 15,705 crore, while Rs 2,238.78 crore 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.