41 CPSEs Failed To Comply With wp Norms
The Comptroller & Audit General of India (CAG) report of Central Public Sector Enterprises has revealed a serious lack of initiative, implementation and desire to implement Corporate Social Responsibility scheme in at least 41 out of 110 central public sector enterprises (CPSE’s). A review of the wp budget/expenditure by the CPSEs during the year 2012-13 was conducted for 103 CPSEs with profit of more than Rs. 10 crore. Out of these, 41 CPSEs did not comply with the Department of Public Enterprises (DPE) guidelines for minimum wp budget/expenditure.
The CAG noted that the ‘compliance was not satisfactory’ in the case of CPSEs earning profit between Rs 10 crore and Rs. 500 crore, as 29 out of 65 CPSEs failed to comply with the guidelines. Out of 38 CPSEs with profit of more than Rs. 500 crore, 12 CPSEs did not comply with the minimum requirement, the CAG noted in a report.
A detailed study of top 10 wp defaulters shows the pathetic state of affairs at CPSEs.
- Out of top 10 CPSEs, 5 spent nothing on wp activities during 2012-13.
- Out of top 10 CPSEs, 8 had made no budgetary provision for their wp spend.
| CPSE’s Name | wp Shortfall (Rs Cr) | |
| 1 | Mazagon Dock Limited | -7.26 |
| 2 | Eastern Coalfields Limited | -4.81 |
| 3 | Bharat Coking Coal Limited | -4.11 |
| 4 | Antrix Corporation Limited | -3.42 |
| 5 | Madras Fertilizers Limited | -2.98 |
| 6 | Rail Tel Corporation of India | -2.30 |
| 7 | Chennai Metro Rail Limited | -2.13 |
| 8 | NTPC Vidyut Vyapar Nigam Limited | -2.88 |
| 9 | Bharat Dynamics Limited | -1.07 |
| 10 | National Fertilizers Limited | -1.06 |
The CAG observed that compliance was comparatively better among large CPSEs which earned a profit of more than Rs. 500 crore, considering the fact that the shortfall was in only 12 out of 38 CPSEs and as many as 23 CPSEs spent/provided for wp in excess of the minimum requirement.
The CAG observed that compliance was comparatively better among large CPSEs which earned a profit of more than Rs. 500 crore, considering the fact that the shortfall was in only 12 out of 38 CPSEs and as many as 23 CPSEs spent/provided for wp in excess of the minimum requirement.
The CAG also observed that, as per the opinion of the Expert Advisory Committee of the Institute of Chartered Accountants, a reserve may be created as an appropriation of profits for the unspent amount towards wp. However, a few CPSEs were creating a provision of liability for the unspent amount towards wp instead of appropriating the amount as reserve. DPE may consider issuing a direction to CPSEs insisting on uniform accounting for the unspent amount towards wp.
The DPE’s guidelines on wp require that CPSE budget will be compulsorily created every year, through a Board Resolution, as a percentage of net profit in the following manner.
CPSEs Budgetary Allocation for wp based on PAT:
(i) Less than Rs.100 crore: 3% – 5%
(ii) Rs. 100 crore to Rs. 500 crore: 2% – 3%
(iii) Rs. 500 crore and above: 1% – 2%
