Morung Express News
Dimapur | November 18
Almost all the North East states and particularly Mizoram and Nagaland are least favoured destinations for corporate philanthropic activities in India in the form of their Corporate Social Responsibility (CSR).
According to data by provided by the Minister of Finance and Corporate Affairs, Nirmala Sitharaman on November 18 in reply to a Starred Question in the Lok Sabha, in last three financial years, CSR‘s expenditure in Nagaland was mere Rs 2.24 crore. It was even lesser in Mizoram at Rs 1.38 crore.
The state receiving the highest corporate largesse in the NE was Assam at Rs 164.60 cr, Rs. 269.92 and Rs 86.23 respectively in the last three financial years - 2015-16, 2016-17, 2017-18.
Arunachal Pradesh received the second highest at Rs 1.48 cr, Rs 24.05 cr and Rs. 11.94 cr respectively during the same period.
However, in almost all the states, the CSR spending showed decreasing trends. For instance, CSR’s expenditure in Nagaland decreased from Rs. 0.96 cr in 2015-16 to Rs 0.92 in 2016-17, which further declined by over 50% to Rs 0.36 cr in 2017-18. In Assam, from Rs 269.92 cr in 2016-17, it decreased drastically to Rs 86.23 in 2017-18.
In what could be reflective of the general business sentiment and economic slowdown in the recent past, the overall CSR’s expenditure showed declining trends in the last three years from Rs 14,517.19 cr in 2015-16 to Rs 14,329.53 in 2016-17, and further falling to Rs 13,620.51 in the last fiscal.
Maharashtra garnered the lion’s share of CSR’s expenditure garnering a total of Rs 2,527.04 cr in the last financial year and reflected an increasing trend.
Karnataka at Rs 950.92 cr last fiscal was in the distant second, though it also showed an increasing trend. Gujarat followed closely in third receiving Rs 768.96 cr CSR’s expenditure in 2017-18.
The figure provided was upto June 30, 2019.
What is CSR?
CSR is a model that helps a company be socially accountable and with the amendment of Companies Act, 2013, India became the first country in the world to introduce the same as a “mandatory provision by imposing statutory obligation on Companies to take up CSR projects towards social welfare activities.”
It prescribed companies “having net worth of rupees five billion or more, or turnover of rupees ten billion or more or a net profit of rupees fifty million or more during any financial year” to spend 2% of average net profits made during the three preceding years on CSR activities.
Accordingly, Members of Parliament, Sunil Kumar Singh and PP Chaudhary raised the questions regarding the amount spent on CSR by corporate entities during the last three years. They also sought information on details and reasons if there are large variations between amounts of CSR funds spent among various States and whether the Government is providing any incentives to corporate entities to ensure that CSR funding is available in less developed States.
In reply, the Minister of Corporate Affairs noted that the figure was based on the basis of filings made by the companies in the MCA21 registry.
There is variation between amounts of CSR funds spent among various States; however, as per the Section 135 (3) & (4) of the Companies Act, 2013, CSR is a Board driven process and the government has no role in this regard, the minister said.
Under the provision of the same act, the government is not providing any incentives to corporate entities for undertaking CSR project, the minister added.