Maharashtra’s leading business houses must loosen their purse strings to ensure greater participation in the government’s efforts towards battling drought, the Opposition has said.
Raising a demand for imposing a 2% duty on companies outside Maharashtra which operate in the State, leader of the Opposition Dhananjay Munde said the State government must ensure greater scrutiny of corporate social responsibility (CSR) activities of out-of-State companies.
“Firms that have been registered in the State prior to March 31, 2018 must pay a 2% cess on the net profit towards drought-relief measures. As it is, the CSR regulations in Maharashtra are not properly implemented,” Mr. Munde said in the Upper House on Wednesday.
According to Section 135 of the Companies Act, 2013, all companies with earnings above specified thresholds for turnover, net worth or net profit have to spend at least 2% of the average net profit calculated for three immediately preceding financial years, on CSR activities specified in Schedule VII of the Act.
The data released by the Union Ministry of Corporate Affairs shows CSR funding in Maharashtra stood at ₹702 crore in 2017, an over 61% drop when compared to the ₹1,810 crore committed by companies in 2016.
Non-bank contribution
The leader of the Opposition had raised a motion on the current drought-like situation. In suggesting measures to counter it, Mr. Munde urged the State to not only regulate private companies but also push non-banking financial companies (NBFCs) to make a contribution towards drought-relief efforts.
The Nationalist Congress Party leader in the Legislative Council said, “NBFCs extend loans to farmers at high interest rates — personal and housing loans — later pressurising them for repayment. The government must restrict district officers from issuing orders to seize homes of farmers who are not able to pay NBFCs back.”
Corporates roped in
Maharashtra has roped in major corporate houses to take part in drought-relief work. Among the ongoing CSR schemes in the State are Reliance Jio’s offer to provide free connectivity in 22 villages and other corporates covering 1,000 villages under the Jalyukta Shivar and the Village Social Transformation Scheme (VSTS). Under the VSTS, corporates have committed ₹134 crore over the next three years.