Lok Sabha Question No. 3252 (UNSTARRED), answered on 2016-08-05
Subject: High Level Committee on CSR
Ministry: CORPORATE AFFAIRS
Asked by: SHASHI THAROOR, KANWAR SINGH TANWAR, ASADUDDIN OWAISI

## GOVERNMENT OF INDIA

## MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA

## UNSTARRED QUESTION NO. 3252

ANSWERED ON FRIDAY THE 5 th  AUGUST, 2016 /

SHRAVANA 14, 1938 (SAKA)

## HIGH LEVEL COMMITTEE ON CSR

## QUESTION

3252. DR. SHASHI THAROOR:

SHRI KANWAR SINGH TANWAR:

SHRI ASADUDDIN OWAISI:

Will the Minister of CORPORATE AFFAIRS

be pleased to state:

- (a) whether the Government has made any assessment with regard to effectiveness of Corporate  Social  Responsibility  (CSR)  and  if  so,  the  details  along  with  the  findings thereof;
- (b)  whether  the  Government  had also  constituted  a High Level Committee (HLC)  to suggest measures and methodology for proper implementation of CSR and if so, the details thereof;
- (c) the major recommendations made by the HLC along with the action taken by the Government thereon;
- (d)  whether  the  HLC  recommended  that  the  Ministry  should  collate,  compile,  and establish a common database to map CSR expenditure of companies and if so, the details thereof; and
- (e) whether the Government would consider to establish a public database to aid in the analysis of CSR expenditure and outcomes and direct the distribution of CSR funds to neglected regions/sectors, if so, the details thereof and if not, the reasons therefor?

## ANSWER

THE MINISTER OF STATE IN THE

MINISTRY OF CORPORATE AFFAIRS                        (SHRI ARJUN RAM MEGHWAL)

कारपोरेट कार्य मंत्रालर् में राज्र् मंत्री

(

श्री अर्जयन राम मेघवाल )

- (a) :    An  assessment  of  CSR  expenditure  of  4257  companies  for  the  year  2014-15 indicates  that  116  Public  Sector  Undertakings  (PSUs)  and  1790  Private  Sector companies  together  have  spent  Rs  8029  crores  during  2014-15  as  summarised below:

Contd…p2/-

कारपोरेट कार्य मंत्री

## CSR Expenditure during 2014-15 (in Rs. Crore)

| Sr. No.   | Company Type             |   Total companies |   No. of Companies with CSR expenditure |   No. of Companies with no CSR expenditure |   Actual CSR expenditure (in Rs. Crore) (2014-15) |
|-----------|--------------------------|-------------------|-----------------------------------------|--------------------------------------------|---------------------------------------------------|
| 1.        | PSUs                     |               169 |                                     116 |                                         53 |                                              2364 |
| 2.        | Private Sector Companies |              4088 |                                    1790 |                                       2298 |                                              5665 |
|           | Total                    |              4257 |                                    1906 |                                       2351 |                                              8029 |

(b) to (d) : A High Level Committee, set up by the Ministry of Corporate Affairs to suggest measures  for monitoring the progress of implementation of Corporate Social Responsibility (CSR) policies by companies, submitted its report on 22nd September, 2015 alongwith its recommendations. The report, including the recommendations of the  Committee,  has  been  placed  in  the  public  domain  on  the  Ministry's  website (www.mca.gov.in). Major recommendations of the Committee includes, inter-alia, the following:

-  It would be desirable to conduct a review of the CSR provision of the Act after three years.
-  Ceiling on administrative overhead cost should be increased from  5% to not more than 10% of the CSR expenditure.
-  Definition  of  the  term  'net  profit'  used  under  the  Act  and  Rules  need  to  be clarified.
-  Re-examination of reference to the 'any financial year' in Section 135 (1) of the Act with a view to making necessary amendment(s) either in Section 135 (1) or in the relevant rule.
-  Board and the CSR Committee should be managing the monitoring of their own CSR at their level.
-  Government  should  have  no  role  to  play  in  engaging  external  experts  in monitoring the quality and efficiency of CSR expenditure of Companies.
-  The  unspent  balance  out  of  the  CSR  fund  should  be  allowed  to  be  carried forward with a sunset clause of five years, after which the unspent balance should be transferred to one of the funds listed in Schedule VII.

Contd…p3/-

-  An omnibus clause may be included in Schedule VII of the Act to suggest that CSR activities must be for larger public good and for any activity that serves public  purpose  and  /or  promotes  the  wellbeing  of  the  people,  with  special attention to the needs of underprivileged.
-  All  information  related  to  implementation  of  CSR  by  companies  including amount spent, activity undertaken, geographical area covered as reported by companies to be complied by Ministry of Corporate Affairs and placed in public domain.

The Ministry has taken inter-alia the following actions on the recommendation of the HLC:-

- (i) Report of the HLC was referred to Company Law Committee (CLC).
- (ii) Some of the recommendations such as definition of 'any financial' year, definition of 'Net Profit' for the purpose of Section 135, and reference to Schedule VII were agreed to by the CLC and necessary amendments have been introduced in the Companies (Amendment) Bill, 2016.
- (iii) A set of Frequently Asked Questions in the form of Clarificatory Circular have been issued by the Ministry on 12th January, 2016 and the same is placed in the public domain (www.mca.nic.in).
- (iv) Information relating to CSR expenditure by companies have been collated and compiled.

(e)  :  No,  Madam.    Board  of  the  CSR  eligible  company  is  empowered  under  the Companies  Act  2013  to  allocate  CSR  fund  across  various  development  sectors  or geographic  regions.  Ministry  of  Corporate  Affairs  neither  issues  direction  nor  any advisory to companies in this regard.

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