Punjab lags behind in CSR spend, got just ₹234 crore in three years

FUND OUTFLOWS With 93% of money going out, govt starts efforts to persuade companies to spend within state

CHANDIGARH : Punjab, which recently set up a high-powered advisory board to attract funds and streamline various corporate social responsibility activities, ranks low on India Inc’s priority list for CSR spending.

The state has received ₹234.27 crore – a minuscule 0.55% of total ₹42,467.23 crore of CSR spending in different states and union territories – between financial years 2015-16 and 2017-18, according to the Union ministry of corporate affairs data based on the filings made by the companies up to June 30 last year.

Though the annual CSR expenditure by companies in Punjab has gone up slightly, from ₹69.93 crore in 2015-16 to ₹88.51 crore in 2017-18, it remains far below the fund support that all other major states, including neighbouring Haryana and Rajasthan, have received.

During the same three-year period, companies have spent ₹1,554.70 crore and ₹1,027.24 crore

on CSR activities in education, health and other sectors in Delhi and Haryana, respectively. Similarly, northern states of Rajasthan and Uttar Pradesh have also cornered a bigger share of CSR funds than Punjab.

According to the Companies Act, 2013, companies with a net worth of at least ₹500 crore, turnover of more than ₹1,000 crore, or a net profit of ₹5 crore or more are required to spend 2% of their average profits during the three immediately preceding financial years on CSR activities. The law empowers the board of the company to decide the activities to be undertaken and the area for implementation of the CSR projects.

COMPANIES SPENDING OUTSIDE THE STATE

The main reason for the low CSR spending, which is also the biggest worry for the state authorities, is that big companies in Punjab are also spending more money outside the state, making it a ‘net donor’.

Of the CSR spending of ₹2,232.16 crore made between 2014-15 and 2017-18 by companies registered in Punjab, ₹161.64 crore, or 7.24%, was spent on CSR in the state, according to an official report released four months ago. The balance CSR funds of ₹2,070.52 crore went to other states whereas all that Punjab got from companies registered in other states during the four-year period was ₹126.13 crore.

In comparison, Haryana received ₹1,196.84 crore during the same period against the total expenditure of ₹1,029.35 crore undertaken by the companies registered in the state, thanks to higher inflow of CSR funds from entities in other states. An officebearer of a leading industry association ascribed the low CSR spending to lack of a proactive approach and robust environment for participation of companies or non-governmental organisations or trusts founded by them.

COURSE CORRECTION

The state government has started taking corrective measures to make serious effort to get CSR funding recently. Additional chief secretary (industries and commerce) Vini Mahajan said there was a need to reach out to companies operating in Punjab in a professional manner, identify appropriate avenues and provide handholding support to get them to undertake CSR activities in the state. “We have put in place an administrative platform involving all the stakeholders for systematic channelisation of CSR funds and build confidence among companies that their money will be properly utilised for meaningful initiatives,” she said. A state corporate social responsibility board under the chief minister as a well as a CSR authority under the chief secretary were approved by the council of ministers two months ago for taking up CSR projects in the state. The industries department is also engaging a full-time professional as chief executive officer for its CSR push.