Rajasthan Govt. Sets Up CSR Authority; Indian Cos Evade CSR Spending

Rajasthan government has constituted Rajasthan Corporate Social Responsibility Authority for effective implementation of Corporate Social Responsibility (CSR) activities, proper utilisation of CSR funds and high level monitoring.

Chief Secretary at the helm

An 18-member authority, constituted under the chairmanship of the Chief Secretary, will guide about CSR provisions and activities under the Indian Companies Act by coordinating with various industrial groups in the state, an official statement said. It will also conduct CSR activities with mutual coordination, it said.

A 19-member advisory board has also been formed under the chairmanship of the Chief Minister to guide the authority from time to time. The Industries Minister will be the Vice-Chairman of the board.

CSR fund will be set up in the state at the level of authority and infrastructural facilities will be created through the fund as per the priorities of the state. Suggestions will also be taken from industrial groups, the statement said.

Indian companies evading CSR spends

Meanwhile the Ministry of Corporate Affairs reports that half of the companies operating in India do not report their CSR activity to the government, and several companies evade a huge amount of money required to be spent on CSR every year.

In FY18, as many as 46% of the companies did not report their CSR expenditures and progress. Even the companies that report their activity, spend much less than what they must. Out of the total CSR prescribed of INR 23,247 crores in FY18, the companies spent only INR 13,326 crores, which is only 57% of the required expenditure.

The companies which are liable for CSR must have their CSR policies, however out of 21,337 companies that reported itself liable for the CSR expenditure, only 6,326 companies said that they have a CSR policy.

There is a high percentage of companies not reporting on constitution of CSR committee every year. Further, the companies constituting CSR committee increased initially from the year 2014-15 to 2015-16 and then declined substantially in 2016-17. However, the figures have improved for the year 2017-18 and may further revise as and when the companies file their annual report.

The average spend by a government company is hovering between INR 8-10 crore per company between 2014-15 to 2017-18 whereas the average spend by a private company has steadily increased from INR 72 lakhs per company in 2014-15 to INR 95 lakhs per company in the year 2017-18.

Even though the sum of contribution to CSR activities with respect to the total prescribed CSR for all the years may be moderate, it is important to note that the culture of being responsible towards society is being imbibed by more and more companies.