Lok Sabha Question No. 2808 (UNSTARRED), answered on 2022-03-21
Subject: Amendment of CSR Rules
Ministry: CORPORATE AFFAIRS
Asked by: Sudheer Gupta, Sanjay Sadashivrao Mandlik, Manoj Kumar Tiwari, Bidyut Baran Mahato, Shrirang Appa Barne, Sambhajirao Mane Dhairyasheel, Prataprao  Jadhav

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 2808

ANSWERED ON MONDAY, MARCH 21, 2022/

PHALGUNA 30, 1943 (SAKA)

## AMENDMENT OF CSR RULES QUESTION

2808. SHRI SUDHEER GUPTA:

SHRI SANJAY SADASHIVRAO MANDLIK:

SHRI MANOJ TIWARI:

SHRI BIDYUT BARAN MAHATO:

SHRI SHRIRANG APPA BARNE:

SHRI DHAIRYASHEEL SAMBHAJIRAO MANE:

SHRI PRATAPRAO JADHAV:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) whether the Government is planning to amend the Corporate Social Responsibility (CSR) rules under the Companies Act, 2013 to make it mandatory for the companies to create a corpus for disaster management;
- (b) if so, the details thereof and the work done by the Government in this direction so far;
- (c)  whether  the  Government  has  directed  companies  to  create  its  separate  disaster management  fund  and  if  so,  the  details  thereof  and  the  response  of  the  prominent companies in this regard;
- (d) whether the Government intends to introduce any further non-financial obligations as part of CSR such as mass awareness campaigns, distribution of disaster management kits, etc. and if so, the details thereof;
- (e)  whether  CSR  funds  spent  by  the  companies  is  often  digressed  by  the  companies resulting in defeat of the purpose and if so, the details thereof; and
- (f) the other steps taken/being taken by the Government to make sure that CSR funds are spent properly by the companies?

## 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) & (b):  No such proposal is under consideration of the Government.
- (c): No such direction has been issued by the Government.

(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. Schedule VII of the Act indicates the activities that

can be undertaken as CSR.  Item no. (xii)  of  Schedule  VII  of  the  Act  enlists  'disaster management,  including  relief,  rehabilitation  and  reconstruction  activities'  as  eligible CSR activity. The Ministry vide General Circular no. 21/2014 dated 18th June, 2014 and 14/2021 dated 25 th  August, 2021 had clarified that items mentioned in Schedule VII are broad based and can be interpreted liberally. Accordingly, mass awareness campaigns, disaster  management  kits,  etc.  are  eligible  CSR  activities  subject  to  fulfillment  of Companies (CSR Policy) Rules, 2014.

(e) & (f): 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  based  on  the recommendations of its CSR Committee. The CSR framework is disclosure based and CSR mandated companies are required to file details of CSR activities annually in the MCA21 registry. All data related to CSR filed by companies in MCA21 registry is available in public domain at www.csr.gov.in.

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

Section 135 of the Act was amended vide Companies (Amendment) Act, 2019 and Companies (Amendment) Act, 2020. These amendments provided for the transfer of unspent CSR amount and made the non-compliance of CSR provisions a civil wrong w. e. f. 22nd January 2021. Further, Companies (CSR Policy) Rules, 2014 was also amended which have strengthened the CSR eco-system by bringing more objectivity, transparency,  entrusting  more  responsibility  on  the  board  and  enhancing  the disclosures by the companies.

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