Lok Sabha Question No. 2041 (UNSTARRED), answered on 2018-12-21
Subject: CSR Mechanism
Ministry: CORPORATE AFFAIRS
Asked by: C. N. JAYADEVAN, G. HARI, VINOD KUMAR BOIANAPALLI

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 2041 ANSWERED ON FRIDAY THE 21st DECEMBER, 2018 AGRAHAYANA 30, 1940 (SAKA)

## CSR MECHANISM

## QUESTION

2041. SHRI C.N. JAYADEVAN:

SHRI G. HARI:

SHRI B. VINOD KUMAR:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) whether the Government has issued notices to nearly 300 companies for not complying with Corporate Social Responsibility (CSR) spending requirement  under  the  companies  law  for  2015-16  and  if  so,  the  details thereof;
- (b) whether for the year 2014-15, prosecutions against 254 were sanctioned and of which 33 companies have filed applications for compounding and if so, the details thereof;
- (c)  whether  the  provision  in  the  Companies  Act,  2013  under  which  the companies should spend at least two percent of its average net profit on CSR activities, has been implemented and if not, the action taken against erring companies;
- (d) whether the Government plans to establish the Centralised Scrutiny and Prosecution Mechanism (CSPM) for enforcement of CSR provisions and if
- so, the details thereof;
- (e) whether CSR spending by companies have come down over the years since 2014-15 and if so, the details thereof; and
- (f)  whether  the  Government  has  set  up  a  panel  to  review  the  existing framework and formulate a road map for a coherent policy on CSR activities
- under the companies law and if so, the details thereof?

## ANSWER

MINISTER OF STATE FOR LAW AND JUSTICE AND CORPORATE AFFAIRS                                          (SHRI P. P. CHAUDHARY)

विधि और न्र्ार् एिं कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(

श्री पी॰ पी॰ चौिरी )

(a) &  (b):    On  the  basis  of  scrutiny,  call  for  information  letters  to  5,382 companies have been issued for the financial year 2015-16. Further, 295 prosecutions have been sanctioned for the financial year 2014-15 and 33 companies have filed application for compounding for the same year.

contd….2/-

(c): Section 135 (3) & (4) of the Companies Act, 2013 ('the Act') empowers the Board of the company, and its CSR Committee to select programmes/ projects/ activities to be undertaken, allocation and utilization of CSR funds towards such activities. Whenever, violation of CSR provisions is reported, the  Registrar  of  Companies  initiates  action  against  such  non-compliant companies after due examination of records.

(d): Ministry has established Centralized Scrutiny and Prosecution Mechanism  (CSPM)  in April, 2018 for the financial years 2015-16, 2016-17 and 2017-18 on pilot basis for enforcement of CSR provisions.

(e):  As  per  the  filings  made  by  the  companies  upto  30.06.2018  in  the MCA  21  registry,  the  data  for  the  financial  years  2014-15,  2015-16  and 2016-17 is as follows:-

Total CSR Amount Spent

|   Sl. No | Financial Year   | Number of Companies   | Total CSR Amount Spent (in Rs. Crores)   |
|----------|------------------|-----------------------|------------------------------------------|
|        1 | 2014-15          | 16,785                | 10,065                                   |
|        2 | 2015-16          | 21,498                | 14,365                                   |
|        3 | 2016-17 19,933   |                       | 13,464                                   |

(f): A High Level Committee on Corporate Social Responsibility (HLC- 2018) has been constituted on 22.11.2018 under the Chairmanship of Secretary, Ministry of Corporate Affairs to review the existing framework and guide and formulate the roadmap for a coherent policy on CSR.  The scope of Committee is as follows:

- (i) To  review  existing  CSR  framework  as  per  Act,  Rules  and  Circulars issued from time to time.
- (ii) To recommend guidelines for enforcement of CSR provisions.
- (iii) To suggest measures for adequate monitoring and evaluation of CSR by companies.
- (iv) To examine and recommend audit (financial, performance, social) for CSR,  as  well  as,  analyze  outcomes  of  CSR  activities/programmes/ projects.
- (v) Any other matter incidental or connected thereto.

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