Social Spend of PSUs Down 10% in 2016-17: Report
The social spend of public sector undertakings fell 10% in 2016-17 from a year ago, even as the total expenditure on Corporate Social Responsibility (CSR) activities by NSE-listed companies saw an increase of 5%, according to data from PRIME Database.
The total social spend of 49 PSUs went down to Rs 2,630 crore from Rs 2,935 crore spent by 46 PSUs in 2015-16, the data showed.
As per CSR rules, which came into force in April 2014, companies subject to the provisions of the law have to mandatorily invest 2% of their net profit in CSR projects. Companies with net worth of Rs 500 crore and above or revenue of Rs 1,000 crore and above or net profit of Rs 5 crore and above have to spend 2% of average net profits of the past three years.
According to PRIME Database, the average net profit of 1,000 companies surveyed over the past three years was Rs 4.79 lakh crore (in 2015-16 it was Rs 4.59 lakh crore). As per CSR requirements, the amount required to be spent by such companies was Rs 9,504 crore (2015-16: Rs 9,120 crore).
The companies, however, went one step further and decided to spend Rs 9,765 crore instead (2015-16: 9,298 crore), Rs 261 crore more than the requirement.
However, Rs 1,563 crore eventually remained unspent (2015-16: Rs 1,966 crore) and the final actual CSR expenditure by these companies was Rs 8,806 crore (2015-16: Rs 8,363 crore), an increase of 5%.
Education saw the maximum spends, followed by healthcare while as much as Rs 2,178 crore, or 25%, of the overall funds was spent on ‘Other Matters’.
Areas such as child mortality, improving maternal health, promotion of gender equality and social business projects saw negligible spends.
In comparison to previous year, spends under Schedule VII (VI) ensuring environment sustainability saw the maximum increase of 31% to Rs 714 crore in 2016-17.
This was followed by spends on hunger/poverty (29% increase) and promotion of education (16%). Spends on contribution to the prime minister’s fund saw the maximum decrease (61%).
Allocation as a per cent of total under different schedules remained constant over the previous year, said Pranav Haldea, managing director, PRIME Database.
The CSR Act mandates companies to appoint a CSR committee comprising at least three members of the board, of which at least one should be independent.
Of the 1,588 companies, 801 had such a CSR committee in place. Several companies, however, went beyond the requirement. According to Haldea, as many as 371 companies had appointed more than three members.
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