New Delhi: Corporate Social Responsibility (CSR) expenditure reported by companies totalled over Rs 1.44 lakh crore during the last five financial years from FY 2019-20 to FY 2023-24, the government informed the Rajya Sabha on Tuesday.
In a written reply to a question in the Upper House, Minister of State in the Ministry of Corporate Affairs and the Ministry of Road Transport and Highways, Harsh Malhotra stated that development-oriented CSR expenditure, based on annual filings made by companies in the MCA21 registry, amounted to Rs 1,44,159.05 crore over the five-year period.
According to the data placed before the House, CSR expenditure stood at Rs 24,965.82 crore in FY 2019-20, Rs 26,210.95 crore in FY 2020-21, Rs 27,141.45 crore in FY 2021-22, Rs 30,932.08 crore in FY 2022-23 and Rs 34,908.75 crore in FY 2023-24.
The minister informed that the government maintains a central database of CSR expenditure reported by companies through the MCA21 registry. All data relating to CSR spending, including state-wise, year-wise, company-wise and project-wise details, is available in the public domain on the official CSR portal.
Under the provisions of the Companies Act, 2013, CSR is a Board-driven process, and the Board of a company is empowered to plan, decide, execute and monitor CSR activities. The existing legal framework mandates the formation of a CSR Committee, formulation of a CSR policy, preparation of an Annual Action Plan on CSR, certification of CSR expenditure by the Chief Financial Officer (CFO) and audit of CSR expenditure by statutory auditors to ensure transparency and accountability.
Further, Rule 8 of the Companies (CSR Policy) Rules, 2014 provides that every company having an average CSR obligation of Rs 10 crore or more in the three immediately preceding financial years shall undertake an impact assessment through an independent agency for CSR projects with outlays of Rs 1 crore or more, which have been completed not less than one year before undertaking the impact study. The details of CSR activities, impact assessment and the annual action plan are required to be reported in the ‘Annual Report on CSR’, which forms part of the company’s Board Report.
The minister also clarified that there is no provision for allocation of CSR funds under the CSR legal framework. As per Section 135(5) of the Companies Act, 2013, CSR-mandated companies are required to spend at least 2 per cent of their average net profits of the three immediately preceding financial years on activities specified in Schedule VII of the Act.
