PM National Relief Fund Scheme Receives 400% More CSR Funds In 2015-16
Corporate Social Responsibility (CSR) Expenditure on PM National Relief Fund (PMNRF) increased four-fold in the last year as compared to the previous year and expenditure on child mortality and maternal health saw a decrease of 22% spending, according to a report released by Prime Database.
The study was based on an analysis of companies listed on National Stock Exchange (NSE). Of the total 1579 listed companies, 920 were applicable under the provisions of CSR in Companies Act. This comprehensive study analysed the annual reports of these 920 companies to understand their CSR spending.
As compared to 2014-15, the succeeding year saw a steep rise in the contribution towards PMNRF. The amount increased from Rs 168 crore in the previous year to Rs 701 crore in 2015-16 which accounts to 418% hike. Hunger/poverty and gender equality sectors also saw a rise in spending with increase of 66% and 38% respectively. However, spending on child mortality and maternal health saw the maximum decrease (22%). According to Pranav Haldea, Managing Director of Prime Database, allocation in terms of percentage under different schedules remained fairly constant over previous year.
Companies Act 2013 mandates companies above a certain threshold to spend 2% of their net profits on social activities listed under Schedule VII of the Act.
Total CSR expenditure by NSE listed companies saw a huge increase of 28% in 2015-16. According to Prime Database, the average net profit of these 920 companies over last three years was Rs. 4.60 lakh crore (2014-15: Rs. 4.22 lakh crore). As per CSR requirements, amount mandatory to be spent by such companies was Rs. 9,146 crore (2014-15: Rs. 8,372 crore). The companies, however decided to spend Rs. 9,309 crore instead (2014-15: 8,606 crore), Rs. 163 crore more than the mandated amount.
Eventually, Rs. 1,984 crore remained unspent (2014-15: Rs. 2,583 crore) and the final actual CSR expenditure by these companies was Rs. 8,345 crore (2014-15: Rs. 6,526 crore), an increase of 28%.
Education received the maximum funds followed by healthcare. A huge Rs. 1782 crore (or 21% of the overall spend) was made under ‘Other Matters’. Areas such as child mortality, improving maternal health, promotion of gender equality and social business projects saw negligible spends.
CSR expenditure from Public Sector Units (PSU) saw a huge increase of 41% from previous year. On an overall basis, 48 PSUs spent Rs. 2,078 crore in 2014-15. This went up to Rs. 2,936 crore by 47 PSUs in 2015-16.
The CSR Act also mandates companies to appoint a CSR committee comprising at least three members of the board of which at least one should be independent. 1197 out of 1520 companies had such a CSR committee in place. Several companies though went beyond the requirement. According to Haldea, as many as 331 companies had appointed more than three members.
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The CSR Journal Team