Lok Sabha Question No. 3303 (UNSTARRED), answered on 2021-08-09
Subject: Diversion of CSR Funds
Ministry: CORPORATE AFFAIRS
Asked by: Kirti Vardhan Singh

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 3303 ANSWERED ON MONDAY, AUGUST 09, 2021/ SRAVANA 18, 1943 (SAKA) DIVERSION OF CSR FUNDS

## QUESTION

3303.  SHRI KIRTI VARDHAN SINGH: Will the Minister of CORPORATE AFFAIRS be pleased to state:

कारपोरेट कार्य मंत्री

- (a) whether during the pandemic caused due to Covid-19, all the CSR funds had been put  on  hold  and  are  diverted  to  the  Government  for  the  purchase  of  medical equipments and para medical facilities; and
- (b) the contribution of the PSUs to the Government in the last two fiscal years, PSUwise and also the contribution of private entities to the fund in the last two fiscal years and whether there has been a mishandling of CSR funds by private entities, 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): No, Sir. Apart from the already allowed activities, Ministry vide General Circular no.10/2020  dated  23.03.2020  clarified  that  Corporate  Social  Responsibility  (CSR) funds  may  be  spent  by  the  companies  for  various  activities  related  to  COVID-19. Further, Ministry vide General Circulars no. 05/2021 and 09/2021 dated 22.04.2021 & 05.05.2021  respectively,  also  clarified  that  spending  of  CSR  funds  for  setting  up makeshift  hospitals  and  temporary  COVID  care  facilities  and  'creating  health infrastructure  for  COVID  care',  'establishment  of  medical  oxygen  generation  and storage  plants',  'manufacturing  and  supply  of  o xygen  concentrators,  ventilators, cylinders  and  other  medical  equipment  for  countering  COVID19'  are  eligible  CSR activities.

- (b): The Government provides the broad framework for 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 CSR activities of the company based on the recommendation of its CSR Committee. The Government does not have any direct role in this regard.

The CSR architecture is disclosure based and CSR mandated companies are required to file details of CSR activities annually in MCA21 registry. As per the Act, 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. Thus, the CSR data for the Financial Year 2020-21 is not available. However, as per filings made by the Companies in the MCA21 registry, the CSR spent by various public and private sector companies for the financial years 2018-19 and 2019-20 respectively is given below:

|                                  | FY 2018-19       | FY 2018-19                      | FY 2019-20       | FY 2019-20                      |
|----------------------------------|------------------|---------------------------------|------------------|---------------------------------|
| Nature of Company                | No. of Companies | Total Amount Spent (in Rs. Cr.) | No. of Companies | Total Amount Spent (in Rs. Cr.) |
| Public Sector Undertakings(PSUs) | 612              | 3847                            | 439              | 4650                            |
| Non-PSUs                         | 24353            | 14881                           | 20910            | 16581                           |
| Grand Total                      | 24965            | 18728                           | 21349            | 21231                           |

(Data upto 31.03.2021) [Source: National CSR Data Portal]

Whenever  any  violation  of  CSR  provisions  is  reported,  action  against  such  noncompliant Companies are initiated as per provisions of Act after due examination of records and following due process of law.

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