Government has issued show cause notices to 496 companies for not complying with CSR norms while about 4,195 companies have not spent a single penny on corporate social responsibility activities, Parliament was informed on Tuesday. The reasons for not spending included companies not finding suitable implementing agency, delay in formation of CSR committee and inability to formulate a well conceived CSR policy.
Watch what else is making news:
Under the Companies Act, 2013, certain classes of profitable entities are required to shell out at least 2 per cent of three-year annual average net profit towards CSR activities. They have to provide reasons for not spending on such projects. Companies having a turnover of at least Rs 1,000 crore, minimum net worth of Rs 500 crore and those having net profit of Rs 5 crore or more in a financial year are required to comply with the CSR norms.
An assessment of CSR expenditure of 7,334 companies for 2014-15 indicates that 4,195 companies did not incur any expenditure on CSR, Minister of State for Corporate Affairs Arjun Ram Meghwal said in a written reply to the Rajya Sabha. Besides, show cause notices have been issued by Registrar of Companies to 496 companies for non-compliance with the CSR norms. Collectively, 3,139 companies have spent a total of Rs 8,803 crore on several CSR initiatives.Most of the funds have been spent on health care projects, environment and animal welfare, education and rural development activities.