Lok Sabha Question No. 1274 (UNSTARRED), answered on 2021-12-06
Subject: CSR Contribution
Ministry: CORPORATE AFFAIRS
Asked by: S. Muniswamy

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 1274 ANSWERED ON MONDAY, DECEMBER 6, 2021/ AGRAHAYANA 15, 1943 (SAKA)

## CSR CONTRIBUTION

## QUESTION

## 1274. SHRI S. MUNISWAMY:

## Will the Minister of CORPORATE AFFAIRS

## be pleased to state:

- (a) whether  the  Companies  Act  stipulates  that  the  companies  falling  under  the Corporate  Social  Responsibility  (CSR)  funding  category  to  contribute/donate  two percent of their net profit for social works under different headings and if so, the details thereof;
- (b) whether the Government proposes to increase the percentage contribution towards CSR to five percent in the near future and if so, the details thereof;
- (c) whether the Government has the records of the corporates which have been going beyond the two percent bracket of CSR expenditure; and
- (d) if so, whether the Government proposes to honour such corporates/philanthropists and 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  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 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  over  immediately preceding  three  financial  years  towards  CSR  as  per  the  CSR  Policy  of  the  Company. Schedule VII of the Act indicates the activities that can be undertaken as CSR  which broadly relate to health, education, environment, sanitation, rural development, disaster management etc.  The Ministry vide General Circular no. 21/2014 dated 18th June, 2014 and 14/2021 dated 25 th  August, 2021 has clarified that items mentioned in Schedule VII are broad based and can be interpreted liberally. A copy of Schedule VII of the Act is given at Annexure.

- (b):   No such proposal is under consideration of the Government.
- (c) & (d):  The CSR mandated companies are required to file their annual CSR details in the MCA21 registry.  An analysis of CSR spending by the companies reveals that some companies have spent more than the mandatory requirement of two percent. It  has been provided  vide  the  Companies  (Amendment)  Act,  2020  and  subsequent  amendment  to Companies  (CSR  Policy)  Rules,  2014  for  setting  off  the  excess  amount    spent  in  a particular year against the obligated CSR amount of  succeeding three financial years.

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## ANNEXURE REFERRED TO IN REPLY TO LOK SABHA UNSTARRED QUESTION NO. 1274 FOR 06.12.2021

Activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to:

[

- (i) eradicating hunger, poverty and malnutrition; promoting health care including preventive health care and sanitation including contribution to the 'Swachh Bharat Kosh' set -up by the Central Government for the promotion of sanitation and making available safe drinking water;
- (ii) promoting  education,  including  special  education  and  employment  enhancing  vocation skills  especially  among  children,  women,  elderly,  and  the  differently  abled  and  livelihood enhancement projects;

(iii) promoting  gender  equality  and  empowering  women,  setting  up  homes  and  hostels  for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens  and  measures  for  reducing  inequalities  faced  by  socially  and  economically  backward groups;

- (iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agro forestry, conservation of natural resources and maintaining quality of soil, air and water including contribution to the 'Clean Ganga Fund' set -up by the Central Government for rejuvenation of river Ganga;
- (v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
- (vi) measures for  the  benefit  of  armed  forces  veterans,  war  widows  and  their  dependents, Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans, and their dependents including widows;
- (vii) training  to  promote  rural  sports,  nationally  recognized  sports,  paralympic  sports  and Olympic sports;

(viii) contribution  to  the  Prime  Minister's  National  Relief  Fund  or  Prime  Minister's  Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund)  any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;

- (ix) (a) Contribution to incubators or research and development projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or Public Sector Undertaking or any agency of the Central Government or State Government; and
- (b)    Contributions  to  public  funded  Universities;  Indian  Institute  of  Technology  (IITs);  National Laboratories  and  autonomous  bodies  established  under  Department  of  Atomic  Energy  (DAE); Department of Biotechnology (DBT); Department of Science and Technology (DST); Department of Pharmaceuticals; Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH); Ministry of Electronics and Information Technology and other bodies, namely Defense Research and Development Organisation (DRDO); Indian Council of Agricultural Research (ICAR); Indian  Council  of  Medical  Research  (ICMR)  and  Council  of  Scientific  and  Industrial  Research (CSIR), engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).
- (x) rural development projects.
- (xi) slum area development.

ExplanationFor the purpose of this item, the term 'slum area' shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.

- (xii)     disaster management, including relief, rehabilitation and reconstruction activities.

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