Lok Sabha Question No. 557 (UNSTARRED), answered on 2023-02-06
Subject: Development of Backward Areas through CSR Fund
Ministry: CORPORATE AFFAIRS
Asked by: Manoj Kumar Tiwari, Nishikant  Dubey

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

UNSTARRED QUESTION NO. 557

ANSWERED ON MONDAY, FEBRUARY 6, 2023/ MAGHA 17, 1944 (SAKA)

## DEVELOPMENT OF BACKWARD AREAS THROUGH CSR FUND QUESTION

557.  SHRI MANOJ TIWARI:

DR. NISHIKANT DUBEY:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) whether  the  Government  proposes  to  develop  the  socially,  economically  and educationally  backward  areas  of  the  country  through  the  Corporate  Social Responsibility (CSR) fund;
- (b)
- if so, the details thereof and the criteria for selecting the said areas; and
- (c) the quantum of CSR funds allocated for the development of the said areas during the last two 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) & (b): 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. As per the extant framework, the CSR provisions are applicable across areas or regions including socially, economically and educationally backward areas of the country. Though the first proviso to Section 135(5) of the Act provides that the company shall give preference to the local area and areas around where it operates, however, the emphasis on local area is only directory and not mandatory in nature as companies need to balance the local area preference  with  the  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.

Similarly, Schedule VII of the Act enlist the eligible CSR activities. As per Schedule VII, activities such as eradicating hunger, poverty and malnutrition, promoting health care,  provisioning  of  sanitation  and  safe  drinking  water,  livelihood  enhancement projects,  measures  for  reducing  inequalities  faced  by  socially  and  economically backward groups, training to promote rural sports, contribution to any other fund set up by the central government for socio economic development and relief and welfare

of the schedule caste, tribes, other backward classes, minorities and women etc. are considered as eligible CSR activities. Further, the Ministry vide General Circular no. 14/2021 dated 25.08.2021 had clarified that entries in Schedule VII are broad- based and  must  be  interpreted liberally  so  as  to  capture  the  essence  of  the  subjects enumerated  therein.  As  such  socially,  economically  and  educationally  backward areas of the country are also intended to be important beneficiaries of CSR spending.

Moreover, as per the input provided by Department of Public Enterprises (DPE), it has  been  issuing  guidelines  from  the  financial  year  (FY)  2018-19  to  all  the administrative  Ministries  and  Central  Public  Sector  Enterprises  (CPSEs)  for adopting a theme-based focussed approach every year regarding CSR expenditure by the CPSEs. These guidelines, inter-alia, provide that CSR expenditure for such thematic programmes should be around 60% of annual CSR expenditure of the CPSEs and the aspirational  districts  as  identified  by  NITI  Aayog  may  be  given preference while undertaking CSR activities.

(c):  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  Government  does  not  issue  any directions to the companies to spend in particular geographical area or activity. On the basis of filings made by the companies in the MCA 21 registry, companies have spent an amount of Rs. 596.78 crores in 93 aspirational districts as identified by NITI Aayog in FY 2020-21 (data up to 30.09.2022) as against Rs.334.78 crores in  85  aspirational  districts  in  FY  2019-20.    All  data  related  to  CSR  filed  by companies in the MCA21 registry, including district-wise data, are available in the public domain and can be accessed at www.csr.gov.in. Further, the companies are required to file CSR details for FY 2021-22 on or before 31.03.2023.

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