CSR funds worth Rs 83.14 bn remained unspent over three financial years

Corporate Social Responsibility (CSR) funds worth over Rs 83.14 billion remained unspent over three financial years starting from 2014-15, according to the government.

Under the Companies Act, a certain class of profitable entities is required to shell out at least two per cent of their three-year annual average net profit towards CSR activities in a financial year.

According to data provided by Corporate Affairs Minister Arun Jaitley in a written reply to the Rajya Sabha, the total unspent CSR funds stood at Rs 83.14 billion during the three financial years -- 2014-15, 2015-16 and 2016-17.

In 2014-15, the prescribed CSR amount was Rs 152.51 billion but Rs 51.85 billion remained unspent. In 2015-16, the figure was Rs 152 billion whereas Rs 8.89 billion was not spent, the data showed.

In 2016-17, the prescribed amount was Rs 157 billion, while Rs 22.38 billion remained unspent.

Jaitley said that whenever violation of CSR provisions is detected, the Registrar of Companies initiates penal action against the non-compliant entities after seeking sanction for prosecution from the ministry.

"For the financial year 2014-15, prosecution against 284 companies were sanctioned out of which 33 companies have filed application for compounding," he said.

The ministry has also set up a Centralised Scrutiny and Prosecution Mechanism in April this year for the financial year 2015-16 onwards on a pilot basis for enforcement of CSR provisions.

"Based on scrutiny, preliminary notices have been issued to 5,382 companies for financial year 2015-16," Jaitley said.