New Delhi – Listed companies have spent around 83% of the money allocated by them for the CSR (Corporate Social Responsibility) initiatives leaving 17% of the unused funds.
A media report said that unspent amount has been on the decline over the years.
The government has now introduced changes that will reportedly require companies to transfer CSR funds to a ring-fenced escrow account, and then transfer the unspent amount to a government fund. The move is to utilise the money deposited in the government fund for public welfare.
The government is also considering the option to punish to punish directors of the companies who are found to have not spend the amount as mandated under the Companies Act.
The Companies Act 2013 prescribes 17 areas of CSR activity in Schedule VII of the act. Section 135 of the Act lays down rules for CSR activity in India. The companies are required to spend at least 2% of the amount of the net profit for the last 3 financial years.
The policy which became effective from 1 April, 2014, mandates those companies for CSR activity which have net worth of 5 billion rupees or more; or turnover of 10 billion rupees or more; or net profit of 50 million rupees or more during any financial year.
Another media report said that almost 47 % of the companies do not spend as per the prescribed limit.
