For the current fiscal year, the corporate social responsibility (CSR) activities of public-sector enterprises (PSEs) will be focused on ‘health and nutrition.’ According to official sources, the Department of Public-Sector Enterprises has told all Central ministries and departments that the PSEs under subject should follow this decision. ‘Health and Nutrition, with a special focus on Covid-related initiatives such as building up makeshift hospitals and temporary Covid care facilities,’ was the subject for 2021-22 as well.
Theme Based Spending
According to the Companies Act, companies in India, including the public-sector enterprises, with a net worth of Rs. 500 crores or more, turnover of Rs. 1000 crores or more, or a net profit of Rs. 5 crores or more are mandated to spend at least two percent of their average profit for the previous three years on CSR activities every year.
The government agreed in April 2018 that CSR funding should be used in a targeted manner, taking into account national priorities at the time. As a result, each year will have a common theme. The theme for 2018-19 was school education and healthcare. CSR spending for thematic programs should account for about 60% of PSEs’ yearly CSR spending. It was also agreed that Aspirational (poor) Districts would be given priority.
Laudworthy Performance by PSEs in CSR
According to the latest India Philanthropy Report 2022 published by global consultant company Bain & Company and strategic philanthropy foundation Dasra, about 93 percent of the total social sector funding in India came from the public sector – which includes the PSEs. The PSEs have been leading by example for India Inc in the field of CSR.
Just recently, Oil India Limited’s CSR programs OIL Arogya and OIL Shakti were awarded Gold as the Best CSR Health Campaign 2022 at the IHW Council’s 6th CSR Health Impact Awards 2022, held at the Hyatt Regency in New Delhi in the presence of government officials, jury members, and prominent personalities. This is not an isolated event. Each year PSEs are accorded with various awards for their contribution to society through CSR.
Reproach to non-complying PSEs
PSE CSR spending has not been devoid of criticism. Last year, an Assam Assembly committee noted that major PSEs including Oil India, ONGC, IOC, and Coal India were not spending the statutory 2% of their annual revenues on CSR initiatives in Assam, despite the fact that their production plants were in the state.
In its 2021 report, the Comptroller & Auditor General said, “out of 95 CPSEs (Central PSEs) reviewed, 29 CPSEs allocated funds towards CSR more than the prescribed minimum two percent of average net profit of three immediately preceding financial years in pursuance of its CSR Policy and 60 CPSEs allocated the required minimum two percent. While three CPSEs allocated less than two percent, three other CPSEs did not allocate funds on account of negative net profit under Section 198 of Companies Act, 2013.”