Out of the ₹1.25 lakh crore which companies have spent as part of their mandatory corporate social responsibility (CSR) over the last seven years, only ₹8 crore — about 0.006% — has been spent in Nagaland, according to government data presented in the Rajya Sabha on Tuesday.
In response to a question on CSR spending, Minister of State for Corporate Affairs Rao Inderjit Singh also said that 4-5% of the last seven years’ CSR funds have been donated to the PM CARES Fund, which has only been in operation for the last two years. He added that CSR money was not allowed to be donated to the Chief Minister’s Relief Funds, as that would mean that “the funds from these companies will only go as per the direction given by the Chief Minister”.
Responding to Bharatiya Janata Party (BJP) MP Geeta’s query regarding the use of CSR funds to develop the socially, economically and educationally backward areas of the country, Mr. Singh said that the broad principle of the law on CSR funds was that the money should be spent in the local area where a company operates, although this was not mandatory. In a supplementary question, Congress MP L. Hanumanthaiah said the government should make it mandatory for companies to spend their CSR funds in backward districts.
“What happens is that, generally speaking, companies tend to spend the money in the areas where they are located. The main beneficiaries thereafter, are say States like Maharashtra, Gujarat, Tamil Nadu, Andhra Pradesh, Delhi. And areas in the northeast, say, Nagaland, get very little CSR spending,” the Minister replied. “So, in the last seven years, since CSR has been in vogue, Nagaland has only been able to get ₹8 crore out of the ₹1.2 lakh crore spent under CSR by various companies.”
He added that there is a guideline for public sector undertakings to spend 60% of their CSR funds in aspirational districts. He later made it clear that it was up to a company’s board to decide where their CSR funds were spent and that while the government could make suggestions, it could not direct any company to spend in the northeastern region.
Biju Janata Dal (BJD) MP Prasanna Acharya asked whether CSR funds were allowed to be used as gap funding for government schemes, thus depriving non-governmental schemes. Mr. Singh then noted that “not more than 4 to 5% has gone into PM CARES Fund” over the last seven years.
The PM CARES Fund was set up only in March 2020 and has accepted CSR funds from PSUs and private sector companies. Its head office is situated in the Prime Minister’s Office, but is not a governmental fund, according to the Centre’s responses to Right to Information queries.
Mr. Acharya noted that CSR funds were allowed to be donated for Prime Minister’s Relief Funds but not for Chief Minister’s Relief Funds, asking how this reflected on the federal nature of the country. The Minister said the Centre had not accepted attempts to allow CSR donation to CM Relief Funds “because then to whichever State it is meant, the funds from these companies will only go as per the direction given by the Chief Minister. We don’t want to have that. The basic idea of sending CSR is to do the best you can for the public good. It cannot necessarily mean only one person can think of that, not the Chief Minister alone”.
