India Inc fares badly in corporate social responsibility

The new Companies Act mandates every company with a net worth of Rs 100 crore (Rs 1 billion) to set aside minimum 2 per cent of their 3-year average annual net profit for CSR activities.

As many as 2,351 companies have not spent a single penny on corporate social responsibility (CSR) activities, while a total of 776 firms have engaged NGOs for implementing such tasks, Parliament was informed on Tuesday.

The new Companies Act mandates every company with a net worth of Rs 100 crore (Rs 1 billion) to set aside minimum 2 per cent of their 3-year average annual net profit for CSR activities.

An assessment of CSR expenditure of 4,257 companies indicates that these firms have spent about 72 per cent of the mandated amount on CSR activities, Corporate Affairs Minister Arun Jaitley said in a written reply to Rajya Sabha.

Of these, 621 firms have spent more than prescribed amount, while 400 companies spent 'exactly' the same amount as prescribed under the rules.

Further, 261 firms have spent 66-99 per cent of the their mandated CSR fund, while 624 companies spent less than 66 per cent of the prescribed amount.

As many as 2,351 companies have not spent any amount on CSR activities.

Out of the total 4,257 firms, 776 have engaged NGOs for implementing CSR, he said.

In a separate reply Jaitley said, "organising private sports tournaments and one-off activities are not permissible under CSR of companies under the Companies Act 2013 and the rules thereunder."

Separately, the minister said a total of 967 complaints are pending before the designated courts, filed by Serious Fraud Investigation Office (SFIO) as on date.

Further, SFIO has received 1,375 complaints in 2015 and 797 in SFIO is the investigation arm of the Corporate Affairs Ministry.