Companies' contribution towards the Prime Minister's Relief Fund fell by 25 per cent to Rs 80.55 crore during 2015-16 compared to the previous financial year (FY), a report tracking the corporate social responsibility (CSR) spend of 1,270 firms has revealed.
However, during the FY ended March 31, 2016, the 1,270 companies collectively spent Rs 8,185 crore, which was 27 per cent more than the Rs 6,400 crore spent during FY15, according to the report by the CII-ITC Centre of Excellence for Sustainable Development.
The spend is 92 per cent of the required CSR budget of Rs 8,900 crore, using two per cent of average net profits of three financial years. The companies collectively had budgeted Rs 10,257 crore, which is 15 per cent more than the minimum budget required.
"CSR is a matter of board-level accountability and the boards should be allowed the space to conduct their job without interference or influence from certain stakeholders that have tendencies to exploit CSR legislation for their narrow gains," CII President Naushad Forbes said.
The absolute amount of money contributed to PM's Relief Fund reduced by 25 per cent to Rs 80.55 crore, the report noted.
The report considered the contribution towards the PM's Relief Fund as contribution to the Prime Minister's National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes (SC), the Scheduled Tribes (ST), other backward classes (OBCs), minorities and women.
Companies having a net worth of at least Rs 500 crore, turnover of Rs 1,000 crore or more, as well as those with a minimum net profit of Rs 5 crore in a financial year, are required to comply with CSR norms.
Such companies have to spend "in every financial year, at least two per cent of the average net profits the company made during the three immediately preceding financial years," towards CSR works, as per Section 135 of the Companies Act.
According to the survey, industrialised states like Maharashtra, Tamil Nadu and Gujarat continue to be among the top three in terms of participation from companies for their corporate social responsibility activities.
Companies investing in North Eastern states jumped from 67 to 111, the survey noted.
Out of the 32 industry categories, absolute spends on CSR decreased in two industries — commercial services and supplies; and oil and gas.
Moreover, a large increase in spend was reported by sectors including automobiles and auto components, consumer durables, metals and mining, financial services, pharma and biotech, telecom services and equipment, textiles, apparels and accessories, transportation, and utilities.