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Companies Spent 60% Money For Education, Healthcare, Rural Development Works In 2014-15 To 2020-21 Period

According to the government, from 2014-15 to 2020-21, companies spent about 60 percent of their CSR funds on education, healthcare and rural development activities.

Under the Companies Act, 2013, certain types of for-profit companies are required to spend at least 2 percent of their average annual net profit over three years in any financial year on Corporate Social Responsibility (CSR) activities.

“All CSR-related data submitted by companies in the MCA21 Registry is available in the public domain…however, the current CSR declaration does not contain the beneficiary details of the companies’ CSR projects.

“Moreover, the completion status of CSR projects or activities is not tracked separately by the government,” State Minister for Enterprise Affairs Rao Inderjit Singh said in a written response to the Lok Sabha on Monday.

Companies have incurred CSR spending worth Rs 25,714.65 crore in 2020-2021 with a maximum amount spent on healthcare.

“An analysis of CSR data (as of 30.09.2022) during the period 2014-15 to 2020-21, reveals that about 35 percent of total CSR spending by the companies in the states of Maharashtra, Karnataka, Gujarat, Andhra Pradesh and Tamilnadu.

“Similarly, about 60 percent of the companies’ total CSR spending goes to education, health and rural development activities,” the minister said in another written response.

Under the law, a company prefers the local area and surrounding areas where it operates.

In 2021, the ministry clarified that the focus on local area is directory only and not mandatory in nature, and that businesses should balance local area preference with national priorities.

The government is not giving the companies specific instructions to spend in a specific geographic area or activity, Singh said.

“Whenever a violation of CSR provisions is reported, action is taken against such non-compliant companies according to the provisions of the law after due investigation of the records and due process of law. Previously, CSR related defaults were criminal offenses.

“To date, sanctions for prosecution have been awarded in 366 cases. Of these, 174 requests for settlement have been filed and 121 cases have been aggravated,” said the minister.

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