Lok Sabha Question No. 42 (UNSTARRED), answered on 2021-11-29
Subject: Monitoring of CSR Funds
Ministry: CORPORATE AFFAIRS
Asked by: Ramya  Haridas

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 42 ANSWERED ON MONDAY, NOVEMBER 29, 2021/ AGRAHAYANA 8, 1943 (SAKA)

## MONITORING OF CSR FUNDS QUESTION

42.  MS. RAMYA HARIDAS: Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a)  the  measures  taken  by  the  Government  to  ensure  checks  and  balances  for utilisation  of  budget  allotted  Corporate  Social  Responsibility  (CSR)  funds  of  the companies registered under the Ministry during the last three years;
- (b) whether there is any provision made by the Government to ensure CSR foundations, registered under the respective State Charity Commissioners, spending and related budget utility of received funds; and
- (c) if so, the details thereof?

## ANSWER

MINISTER OF STATE (INDEPENDENT CHARGE) OF THE MINISTRY OF STATISTICS AND PROGRAMME IMPLEMENTATION; MINISTER OF STATE (INDEPENDENT CHARGE) OF THE  MINISTRY  OF  PLANNING  AND  MINISTER  OF  STATE  IN  THE  MINISTRY  OF

CORPORATE AFFAIRS

## [RAO INDERJIT SINGH]

(a): The Government provides the broad framework for Corporate Social Responsibility (CSR) through Section 135 of the Companies Act, 2013 ('Act'), Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. Under the Act, CSR is a Board driven process and the Board of the company is empowered to plan, decide, execute and monitor the CSR activities based on the recommendation of its CSR Committee. The corporate governance framework along with the existing legal provisions such as mandatory disclosures,  accountability  of  the  CSR  Committee  and  the  Board,  provisions  for statutory audit of accounts of the company etc. provide safeguards in this regard. The recent  amendments  in  the  Companies  (CSR  Policy)  Rules,  2014  have  further strengthened the CSR  ecosystem  by  bringing more  objectivity, transparency, entrusting  more  responsibility  on  the  Board  of  the  company  and  enhancing  the disclosure by the companies.

The CSR architecture is disclosure based and CSR mandated companies are required to file details of CSR activities annually in MCA21 registry which is available in public domain  at  www.csr.gov.in.  Whenever  any  violation  of  CSR  provisions  is  reported, action against such non-compliant Companies are initiated as per provisions of Act after due examination of records and following due process of law.

(b) & (c): Section 135 of the Act read with Rule 4 of the Companies (CSR Policy) Rules, 2014 prescribes that the Board of the company is empowered to undertake its CSR activities either by itself or through implementing agencies, namely:

- i). a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company, or
- ii). a  company  established  under  section  8  of  the  Act  or  a  registered  trust  or  a registered society, established by the Central Government or State Government; or
- iii). any entity established under an Act of Parliament or a State legislature; or
- iv). a company established under section 8 of the Act, or a registered public trust or a registered society, registered under section 12A and 80G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.

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