Lok Sabha Question No. 3615 (UNSTARRED), answered on 2021-12-20
Subject: Norms for CSR Spending
Ministry: CORPORATE AFFAIRS
Asked by: Ramesh Chandra Majhi

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 3615

ANSWERED ON MONDAY, DECEMBER 20, 2021/

AGRAHAYANA 29, 1943 (SAKA)

NORMS FOR CSR SPENDING QUESTION

3615.  SHRI. RAMESH CHANDRA MAJHI: SHRIMATI RAJASHREE MALLICK:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a) the details of the criteria and provisions laid down for the industries and the oil, gas and energy sector companies for spending the Corporate Social Responsibility (CSR) funds;
- (b) whether the Government proposes to issue instructions for spending the full  amount  of  CSR  funds  of  the  oil,  gas,  and  energy  sector  companies operating in Odisha including Nabarangpur, Malkangiri, Koraput and Jugathsingpur  districts  on  the  development  activities  in  the  concerned districts itself in view of the backwardness of these districts;
- (c) if so, the details thereof along with the time by which the said instructions are likely to be issued;
- (d) if not, the reasons therefor, and
- (e) the details of expenditure under CSR funds by the companies operating in Nabarangpur,  Malkangiri,  Koraput  and  Jugathsingpur  districts  of  Odisha during each of the last five years?

## 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) to (d):  The broad framework for Corporate Social Responsibility (CSR) has been provided under Section 135 of the Companies Act, 2013 ('Act'), Schedule VII of  the  Act  and  Companies  (CSR  Policy)  Rules,  2014.  Section  135  of  the  Act mandates every company, including oil, gas and energy sector companies, having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more, or net

profit of Rs. 5 crore or more during the immediately preceding financial year, to spend at least two per cent of the average net profits of the company made during the  immediately  preceding  three  financial  years  towards  CSR  as  per  the  CSR Policy of the Company. The activities undertaken towards CSR should relate to areas or subjects specified in Schedule VII of the Act. The operational framework with respect to CSR is contained in the Companies (CSR Policy) Rules, 2014.

The first proviso to Section 135 (5) of the Act provides that the company shall  give  preference to the local  area and areas around it where it operates. However,  the  emphasis  on  local  area  is  only  directory  and  not  mandatory  in nature  and  companies  need  to  balance  local  area  preference  with  national priorities. The same has also been clarified through Frequently Asked Questions (FAQs) on CSR issued vide General Circular no. 14/2021 dated 25.08.2021. Under the  Act,  CSR  is  a  Board  driven  process  and  the  Board  of  the  company  is empowered to plan, decide, execute and monitor CSR activities of the company based on the recommendation of its CSR Committee. The Government does not issue  any  specific  direction  to  the  companies  to  spend  in  any  particular geographical area or activity.

(e):  All data related to CSR filed by companies in MCA21 registry is available in public domain and can be accessed at www.csr.gov.in.  As per the filings made by  the  companies  in  the  MCA21  registry,  the  CSR  spent  in  Nabarangpur, Malkangiri, Koraput and Jugathsingpur districts of Odisha by all the companies, including the companies operating in those districts, during the financial years (FY) 2016-2017 to 2020-21 is given below:

| District-wise CSR Spent in the State of Odisha (INR Cr.)   | District-wise CSR Spent in the State of Odisha (INR Cr.)   | District-wise CSR Spent in the State of Odisha (INR Cr.)   | District-wise CSR Spent in the State of Odisha (INR Cr.)   | District-wise CSR Spent in the State of Odisha (INR Cr.)   | District-wise CSR Spent in the State of Odisha (INR Cr.)   | District-wise CSR Spent in the State of Odisha (INR Cr.)   |
|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|------------------------------------------------------------|
| Districts                                                  | FY 2016-17                                                 | FY 2017-18                                                 | FY 2018-19                                                 | FY 2019-20                                                 | FY 2020-21                                                 | Total amount                                               |
| Nabarangpur                                                | -                                                          | 1.46                                                       | 1.98                                                       | 0.01                                                       | -                                                          | 3.45                                                       |
| Malkangiri                                                 | -                                                          | 0.25                                                       | 0.04                                                       | 0.02                                                       | -                                                          | 0.31                                                       |
| Koraput                                                    | 12.01                                                      | 1.59                                                       | 2.23                                                       | 14.81                                                      | 0.05                                                       | 30.69                                                      |
| Jugathsingpur                                              | -                                                          | -                                                          | 2.19                                                       | 5.65                                                       | 0.56                                                       | 8.40                                                       |

(Data upto 30.09.2021)              [Source: National CSR Data Portal]

Regarding CSR data for FY 2020-21, it is informed that the companies are required to hold Annual General Meeting (AGM) within six months from the end of financial year.  Thereafter,  financial  statements  and  board  report  containing  disclosure about CSR, are to be filed in MCA21 within 30 days of the AGM. The Ministry vide General Circular No. 17/2021 dated 29.10.2021 relaxed the levying of additional fees  till  31.12.2021  for  the  filing  of  financial  statements  in  respect  of  the FY 2020-21.

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