Corporate Social Responsibility funds worth over Rs 8,314 crore remained unspent over three financial years starting from 2014-15, according to the government.
Under the Companies Act, a certain class of profitable entities are required to shell out at least two per cent of their three-year annual average net profit towards CSR activities in a financial year.
As per data provided by Corporate Affairs Minister Arun Jaitley in a written reply to the Rajya Sabha, the total unspent CSR funds stood at Rs 8,314.08 crore during the three financial years — 2014-15, 2015-16 and 2016-17.
In 2014-15, the prescribed CSR amount was Rs 15,251.32 crore but Rs 5,185.39 crore remained unspent. In 2015-16, the figure was Rs 15,256.20 crore whereas Rs 889.91 crore was not spent, the data showed.
In 2016-17, the prescribed amount was Rs 15,705 crore, while Rs 2,238.78 crore remained unspent.
Jaitley said that whenever a violation of CSR provisions is detected, the Registrar of Companies initiates penal action against the non-compliant entities after seeking sanction for prosecution from the ministry.
“For the financial year 2014-15, the prosecution against 284 companies were sanctioned out of which 33 companies have filed an application for compounding,” he said.
The ministry has also set up a Centralised Scrutiny and Prosecution Mechanism in April this year for the financial year 2015-16 onwards on a pilot basis for enforcement of CSR provisions.
(Source: Money Control)