INDIACSR News Network
NEW DELHI: At a time the government is planning to make it mandatory for all companies to set aside 2% of their previous year’s profit for corporate social responsibility (CSR) activity, data released by Govt shows that maharatna and navratna public sector undertakings (PSUs) have not been able to fully spend their CSR budget.
Data released by the ministry of heavy industries & public enterprises show that the five maharatnas – ONGC, Coal India, IOC, NTPC and SAIL – managed to spend just 49% of the combined budget for three years beginning 2009-10. The spending budget for most PSUs is updated till end September 2011.
The central PSUs are required to set aside a portion of their profits for spending on CSR activities – about 0.5-2% in case of enterprises with net profit in excess of Rs 500 crore in the previous year and about 3-5% where profits are less than Rs 100 crore.
Coal India spent only 27% of the budget, according to information released. Its CSR budget in 2011-12 was about doubled to Rs 553.33 crore and it managed to spend only Rs 37.26 crore till September 2011. In the first year, it spent 92% of the budget and in the second year, about 58%.
Oil and gas explorer ONGC did better, it spent 49% of the budget in the three years. Like Coal India, its performance in the third year was disappointing. It spent only 6% of the budget till September 2011. Indian Oil Corporation spent 85% of the Rs 264.4 crore it set aside and Sail 72% of the Rs 179.68 crore.
The PSUs are required to fix their CSR budget for each financial year and funds are non-lapsable. The CSR activity is also part of the annual memorandum of understanding (MoU) with the government, where each PSU commits to meet targets for revenues and profits. Normally, CSR activity has to be taken up around area where the PSU has commercial activities. They are however free to choose the activities they would like to take up.