As Odisha continues to navigate this changing landscape, questions about equitable and sustained CSR investments remain central to the discourse.
NEW DELHI (India CSR): Recent discussions in the Rajya Sabha on corporate social responsibility (CSR) expenditures by oil public sector undertakings (PSUs) in Odisha over the past five years have inadvertently highlighted the intricate relationship between ministers, their constituencies, and corporate funding priorities.
1. Odisha’s CSR Windfall Under Dharmendra Pradhan
During Dharmendra Pradhan’s tenure as Union Minister for Petroleum and Natural Gas from 2014 to 2021, Odisha emerged as a significant beneficiary of CSR funds from oil PSUs. In 2019-20, nine oil PSUs collectively spent an impressive Rs 350 crore in Odisha. This marked the peak of CSR investments in the state, driven by Pradhan’s influence as a prominent leader from Odisha. Despite being a Rajya Sabha MP, Pradhan’s ability to channel CSR funds into his home state underscored his political clout and strategic focus on his constituency.
2. Post-Tenure Decline in CSR Investments
The financial year following Pradhan’s exit from the petroleum ministry in July 2021 witnessed a sharp drop in CSR funding for Odisha. Spending plummeted to Rs 39.8 crore in 2022-23, a nearly nine-fold decline from the peak in 2019-20. The downward trend continued into 2023-24, with a further reduction to Rs 34.5 crore. This decline has sparked discussions about how the priorities of PSUs shift with changes in ministerial leadership.
3. COVID-19 and Diversion of CSR Funds
The dip in CSR expenditures also coincided with the COVID-19 pandemic and the establishment of the PM CARES Fund in March 2020. In 2020-21, oil PSUs spent only Rs 91.66 crore in Odisha, a substantial decline from the previous year. While the pandemic and nationwide lockdowns played a role, the redirection of funds towards pandemic-related initiatives may have contributed to this significant reduction.
4. Continued Influence on CSR Spending
Interestingly, CSR funding for Odisha rebounded to Rs 114 crore in 2021-22, reflecting Pradhan’s lingering influence even after his move to the education ministry. His ability to mobilize resources for projects in Odisha was evident when, in August 2021, he inaugurated the Skill Development Institute in Bhubaneswar, funded by oil PSUs through CSR contributions. The institute, built at a cost of Rs 300 crore, stands as a testament to the strategic allocation of CSR funds during his tenure.
| 1 | IOCL | 20596.70 | 5301.06 | 3948.47 | 1974.11 | 1074.37 |
| 2 | ONGC | 4486.14 | 853.383 | 4017.46 | 469.864 | 1205.10 |
| 3 | HPCL | 3854.35 | 192.72 | 638.25 | 485.30 | 411.52 |
| 4 | BPCL | 3218.17 | 703.90 | 406.83 | 78.86 | 118.44 |
| 5 | GAIL | 2344.43 | 2000.23 | 2264.65 | 874.77 | 581.48 |
| 6 | EIL | 443.72 | 29.96 | 67.55 | 0.00 | 0.00 |
| 7 | BL | 60.00 | 75.00 | 100.00 | 65.00 | 25.00 |
| 8 | NRL | 0.00 | 9.88 | 0.75 | 32.43 | 35.13 |
| 9 | OIL | 0.00 | 0.00 | 0.00 | 0.50 | 7.27 |
| Total | 35003.51 | 9166.13 | 11443.97 | 3980.82 | 3458.31 |
Source: Oil and Gas PSUs
5. Policy Framework and Political Dynamics
The Companies Act, 2013, under Section 135, mandates that companies spend 2% of their average net profits from the previous three years on CSR activities. However, questions have frequently been raised about whether political leaders or government officials can influence the allocation of these funds.
The government has consistently maintained that CSR is a board-driven process. Minister of State for Corporate Affairs, Rao Inderjit Singh, clarified in parliament that the government does not issue specific directions to companies on CSR spending. Similarly, Minister of State for Finance and Corporate Affairs, Anurag Thakur, emphasized that CSR funds are not meant for implementing government schemes, debunking myths about their misappropriation.
6. Calls for Expanding CSR Utilization
Political leaders have occasionally advocated for relaxing the 2% cap on CSR spending. In 2021, BJP MP Vinay Sahasrabuddhe proposed a private members’ bill to allow 25% of CSR funds to be used for the maintenance of historic monuments. Although the bill was eventually withdrawn, it highlighted the ongoing debate over the scope and application of CSR funds.
(India CSR)
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