CSR PSU

CSR SPENDS BY CENTRAL PUBLIC SECTOR ENTERPRISES

A sum of `3,442.42 crore was spent by 146 Central Public Sector Enterprises (CPSEs) on Corporate Social Responsibility (CSR) activities during the financial year 2017- 18, informed Union Minister for Heavy Industries and Public Enterprises Arvind Ganpat Sawant in the Lok Sabha on July 2 this year. The expenditure made by the CPSEs during 2014-15, 2015-16 and 2016-17 was `2,450.31 crore, `4,028.04 crore and `3,336.50 crore, respectively, the Minister added. 

Out of the 146 CPSEs, ten companies namely National Thermal Power Corporation Ltd (`241 crore), Bharat Petroleum Corporation Ltd (`166 crore), Hindustan Petroleum Corporation Ltd (`156 crore) NMDC Ltd (`169 crore), Oil India Ltd (`100 crore), Power Finance Corporation Ltd (`118 crore), Power Grid Corporation of India Ltd (`158 crore) along with ONGC, IOCL and NTPC spent in excess of `100 crore. Oil and Natural Gas Corporation Ltd (ONGC) spent the highest of `503 crore during the financial year 2017-18, followed by Indian Oil Corporation Ltd (IOCL) and Mahanadi Coalfields Ltd with a spending of `331 crore and `257 crore respectively. The Minister however said that data of 2018-19 will be available after publication of the Public Enterprises Survey 2018-19. After Section 135 of the Companies Act 2013 made it mandatory for the companies to spend at least 2 per cent of the amount of the net profit of the last three financial years on CSR activities, the CPSEs under the Ministry of Heavy Industries have been spending on 17 areas of CSR activity as prescribed in the Schedule VII of the Act.

The Central Government in December 2018 stated that 384 CPSEs have spent `10,806.92 crore for carrying out CSR activities and projects between 2015-16 and 2017-18 fiscal year. An expenditure of `4,028.04 crore was incurred by 106 CPSEs in 2015-16, 126 PSUs `3,336.50 crore in 2016-17 and 152 enterprises `3,442.38 crore in 2017-18 for CSR activities.

The Department of Public Enterprises (DPE) is the nodal agency for CPSEs but it does not have any CPSE under its direct administrative control. As per CSR provisions of the Companies Act of 2013, CSR activities are taken up by the PSUs on the recommendations of CSR Committee constituted with the approval of boards of respective CPSEs. All CPSEs are mandated to implement such activities and projects out of the activities listed in the Companies Act of 2013 in pursuance of their CSR policy as notified by the Ministry of Corporate Affairs in Companies (CSR Policy) Rules, 2014.

Programmes and Activities under CSR

 

Mere donations to philanthropic/charity or other organizations do not come under CSR. As per the guidelines, CSR initiatives of the Central Public Sector Enterprises should have the thrust on: areas related to the business of the CPSEs as a natural corollary to the business; investment in CSR should be project-based; the CSR activities should generate community goodwill, create social impact and visibility; for every project, the time frame and periodic milestones should be finalized; the activities should also involve the suppliers in order to ensure that the supply-chain also follows the CSR principles.

The other points to be kept in mind include: the CSR activities should help in building a positive image of the company in the public perception; may be related to United Nations Global Compact Programme on Environment and closely linked with the principles of Sustainable Development; and based on the immediate and long-term social and environmental co-consequences of their activities. The CPSEs are supposed to shoulder responsibility for restoring/compensating for any ecological damage that is taking place as a result of its operations. They are also supposed to create value in innovative social investments in the community and focus on the areas of “Preparedness and Capacity Building” in Disaster Management.

As per guidelines, specialized agencies could be made to work independently or in tandem with other agencies. Such specialized agencies would include: community based organizations whether formal or informal elected local bodies such as Panchayats, voluntary agencies (NGOs);, institutes/academic organizations, trusts, missions, etc.; self-help groups; government, semi-government and autonomous organizations; Standing Conference of Public Enterprises (SCOPE); Mahila Mandals or Samitis; contracted agencies for civil works, professional consultancy organizations, etc.

Many recommendations were made during the CPSE Conclave held in April 2018 related to utilization of CSR funds in a focused manner towards national priorities. Following this there were lots of deliberations by the Department of Public Enterprises (DPE) with CPSEs, select Ministries/Departments, NlTl Aayog and the Committee of Secretaries. It was decided that a common theme may be identified for each year for undertaking CSR by CPSEs. For the year 2018-19, school education and health care were taken up as the theme for focused intervention. It was also decided that CSR expenditure for thematic programme should be around 60 per cent of annual CSR expenditure of CPSEs and development of aspirational districts should be given preference. The NITI Aayog would pilot the project, it was decided. Contributions to Prime Minister’s Relief Fund, Swachh Bharat Abhiyan and Swachh Bharat Kosh and Clean Ganga Fund (National Mission for Clean Ganga) are the three new areas where the CPSEs have increased their CSR spending.

CPSEs on the Clean India Mission

 

The Swachh Bharat Mission gave tremendous opportunity to the CPSEs to work towards making India clean and eventually green. The Swachhata Action Plan (SAP) of the CPSEs focused on awareness programmes/IEC activities, waste disposal /waste recycling plan, working towards having a cleaner environment which included creating a pollution free transportation system, supporting R&D projects in capital goods sector for waste management, etc.

Involvement of public is a prerequisite for the success of Swachh Bharat and so the CPSEs were allowed to associate with non-governmental organizations (NGOs) and schools in their campaign for a Swachh Bharat. Out of the 31 CPSEs and four autonomous bodies under the administration of Department of Heavy Industry (DHI), the 21 loss making CPSEs were asked to add value to the programme through their manpower resources towards sensitizing their employ ees and other people residing in the areas near their plant by undertaking IEC activities/ awareness programmes through mass media and other campaigns. The DHI provides them financial assistance out of its budgetary resources to be allocated in each financial year by the Ministry of Finance for the Swacchta Action Plan.

The CPSEs and autonomous bodies were asked to initiate innovative measures to create facilities for effective disposal and recycling of non-industrial waste generated in their residential colonies and neighbouring areas to create a clean and green atmosphere in and around their premises. Creating Pollution free transportation system Department of Heavy Industry formulated a scheme namely FAMEIndia, wherein it intended to support the hybrid/electric vehicle market development and its manufacturing ecosystem to achieve self-sustenance, is another area where CSR funds are spent. The scheme aimed at reducing pollution from road transport sector in near future, result in clean mobility and reduction in consumption of fossil fuel. The activities to be undertaken for achieving clean pollution free transportation system broadly focused on four areas: technology development, demand creation, pilot projects and charging infrastructure. The scheme aims at incentivizing all vehicle segments, i.e. two-wheelers, three-wheeler autos, passenger four-wheeler vehicles, and light commercial vehicles and buses. Another area of focus was on supporting R&D projects in capital goods sector for waste management in association with the industrial associations, reputed institutions, etc. A maximum ceiling of `50 lakh out of the budgetary resources to be made available under Swachhta Action Plan was fixed. Budget flexibility among different activities related to CPSEs only may also be allowed so as to have intended results of Swachhta activities.

CSR by Steel Majors

The thrust areas of the CSR activities of CPSEs under the Ministry of Steel has been promotion of education and health, women empowerment, sustainable income generation through self-help groups, assistance to divyangs (disabled), access to water and sanitation facilities, village development, environment sustenance, sports coaching, promotion of traditional art and culture, etc. The major CSR projects of the steel companies are in the periphery of steel plants, steel townships and mines which are predominantly inhabited by Scheduled Tribe, Scheduled Castes and Backward population in Chhattisgarh, West Bengal, Jharkhand, Andhra Pradesh, Bihar, Odisha, etc. Minister of Steel Dharmendra Pradhan stated in the Lok Sabha on July 8, 2019, that unspent balance for the previous year, if any, is carried forward to the next year for utilisation for the purpose for which it was allocated. Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL) have even allocated CSR funds during loss years to sustain the momentum of the ongoing committed CSR activities, he stated.

States Focussed and Critical Acclaim

In the General Purpose Financial Report of CPSEs, Commercial, tabled in the Parliament in August 2018, the Comptroller and Auditor General of India (CAG) stated that during the review of the CSR expenditure of 77 CPSEs under 24 Ministries, it was found that very few concentrated on Punjab and north-eastern states like Mizoram, Manipur, Nagaland and Sikkim. The bulk of the CSR funds were spent in states like Maharashtra, Gujarat, Uttar Pradesh, Chhattisgarh, Odisha and Andhra Pradesh, which brought criticism from some quarters.

The CAG also questioned the money spend by Oil & Natural Gas Corporation, Hindustan Petroleum Corporation Limited, Bharat Petroleum Corporation Limited, Indian Oil Corporation Limited and Oil India Limited for contributing to Sardar Vallabhbhai Patel Rashtriya Ekta Trust (SVPRET) for building of the `3,000-crore Statue of Unity as it was not a heritage asset and did not qualify for CSR spending. However, ONGC justified it as a spending on development of Narmada river bank and promotion of education.