Minister of State for Finance and Corporate Affairs Anurag Singh Thakur, during Question Hour in the Rajya Sabha, said there is a clear definition in the Schedule 7 of the Companies Act 2013 where all CSR funds can be spent.
“I want to say the funds are not used for implementing government schemes… There should not be a myth that CSR funds are used for implementing government schemes. The government makes adequate funding for various programmes,” he said.
The CSR funds are used for the development of local areas as part of social responsibility for which there is a company’s board-driven policy, he said.
So far, 60 per cent of the funds are spent through implementing agencies and 40 per cent by companies through its various bodies, he added.
Further, the minister said that there was no provision of implementing agencies and details of NGOs when the Companies Act came in 2013.
However, the current government made changes to the law and made it mandatory for implementing agencies to register themselves on the Ministry of Corporate Affairs registry, which will help in getting the details of implementing agencies, he said.
Responding to a query on a mechanism to find out about funds spent on different heads in disadvantaged areas, the minister said that maximum funds are spent on education, healthcare and rural development across the country.
To another query asked by TDP leader Kanakamedala Ravindra Kumar that if the government plans to set up a separate mechanism to monitor and inspect the CSR activities, the minister said a directive has been issued to companies spending more than 10 crore CSR funds to submit an impact assessment report.
To another query on plans to support NGOs facing fund crisis in the wake of COVID-19, the minister said the CSR spending is based on the company’s board-driven policy.
“The company’s board decides where and how much to spend,” he added.