Lok Sabha Question No. 4191 (UNSTARRED), answered on 2017-08-11
Subject: Unspent Funds under CSR
Ministry: CORPORATE AFFAIRS
Asked by: YERRAM VENKATA SUBBAREDDY

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 4191 ANSWERED ON FRIDAY THE 11TH AUGUST 2017 SHRAVANA 20, 1939 (SAKA)

## UNSPENT FUNDS UNDER CSR

## QUESTION

4191. SHRI Y.V. SUBBA REDDY:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) the status of implementation of Corporate Social Responsibility (CSR) by various companies mandated under the Companies Act;
- (b) whether the Government is aware that all companies have not been able to spend their 100 per cent funds allotted under CSR and if so, the details thereof and the reasons therefor;
- (c)  the  amount  of  funds  left  unspent  since  implementation  of  CSR  under Companies Act; and
- (d) whether the Government has devised a monitoring mechanism on pre and post  implementation  of  programmes  under  CSR  so  as  to  ensure  full expenditure of funds by companies under CSR and if so, the details thereof?

## ANSWER

THE MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS                    (SHRI ARJUN RAM MEGHWAL)

(

कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री

श्री अर्जयन राम मेघवाल )

(a) to (d):  Section 135 of Companies Act, 2013 requires every company above the specified thresholds of turnover, or net worth, or net profit to spend at least two per cent of the average net profits earned during three immediately preceding  financial  years  on  Corporate  Social  Responsibility  (CSR).  The section also provides that in case a company fails to spend the specified amount, the Board would specify the reasons for not spending the amount in its report.

Contd…2/-

An assessment of CSR expenditure of 5097 companies for financial year 2015-16, indicates that about Rs. 9822 crores have been spent on CSR, as tabulated below:-

CSR Expenditure during 2015-16 (in Rs. Crore)

| Sr. No.   | Company Type   | Total companies   | No. of Companies with CSR expenditure   | No. of Companies with no CSR expenditure   | Actual CSR expenditure (in Rs. Crore)   |
|-----------|----------------|-------------------|-----------------------------------------|--------------------------------------------|-----------------------------------------|
| 1.        | PSUs           | 172               | 103                                     | 69                                         | 3360                                    |
| 2.        | Private        | 4925              | 2999                                    | 1926                                       | 6462                                    |
|           | Total          |                   |                                         |                                            |                                         |
|           |                | 5097              | 3102                                    | 1995                                       | 9822                                    |

The reasons given by companies for not spending/under spending inter-alia are as below:

-  adoption of long term CSR programmes / projects;
-  non-receipt of utilisation certificate from implementing agencies by the year end;
-  difficulty to find suitable implementing agency;
-  delay  in  formation  of  CSR  committee  /  implementation  of  plan  / reorientation of CSR Policies etc.;
-  Financial restructuring
-  Incurred loss
-  Technical and Procedural difficulty
-  Projects were in conceptualization stage
-  CSR policy formulation is under process
-  Company were primarily focused on creating suitable organizational capacity to identify and undertake appropriate CSR programs/projects

The Board of the CSR eligible company is empowered under the Act to take  decision  on  the  CSR  programmes/projects  to  be  undertaken  which includes devising of monitoring mechanism on pre and post implementation of such programmes/ project under CSR. Ministry of Corporate Affairs has no role to play in this regard.

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