Corporate Social Responsibility activities have turned out to be a successful experiment as over 75 per cent amount has been spent in 2014-15, Finance Minister Arun Jaitley said today, telling corporates that they could also contribute to Prime Minister's Relief Fund for use during natural calamities.
Replying to supplementaries, he said CSR amounts cannot be spent for any political activity and if any amount is spent in that manner, it cannot be a legitimate CSR activity.
"It is a successful experiment which has started because in the first year over 75 per cent of the amount under CSR has been spent," Jaitley said during Question Hour in Rajya Sabha.
"During 2014-15, the first year for CSR, the 2 per cent profits of 460 companies comes to around Rs 8,347.47 crore, of which 75.92 per cent has been spent for CSR activity during the year," he said.
Companies which do not wish to spend their CSR amount can make their contributions to the Prime Minister's Relief Fund that in turn can be used for natural calamities, he said.
To a question on how corporates were using CSR money for political activities, Jaitley said, "Obviously, no money of CSR can be spent for political activity. Schedule VII of the Act specifies the 11 categories under which the CSR money can be spent. If anybody is spending the amount outside that schedule, then it cannot be a legitimate CSR activity."
Asked whether the CSR spending by private companies is more than public sector undertakings, the Minister said, "during the first year, the spending under CSR is 79 per cent for private corporates and 71 per cent for public sector undertakings and that for the first year is a good beginning."
"There are a total of 460 companies, of which 409 are in private sector and 51 are public sector undertakings,"he said.
Asked whether any monitoring was carried out on CSR spending by PSUs, he said there is an in-built mechanism, besides a committee set up to review progress of implementation of CSR.
He said it is monitored by the Corporate Affairs ministry and penal provisions are also there. But, it is also the responsibility of board of directors of a company to see that CSR money is spent.
Jaitley said that 51 PSUs have spent 71.03 per cent of their 2 per cent profits during the first year and what has not been spent is carried forward to the next year.
