New Delhi: The Government has imposed penalties totalling nearly Rs 20 crore on various companies for non-compliance with CSR norms in the last three financial years.
Under the companies law, certain class of profitable firms are required to spend at least 2 per cent of their three-year annual average profit towards Corporate Social Responsibility (CSR) activities in a financial year.
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Finance and Corporate Affairs Minister Nirmala Sitharaman told the Rajya Sabha on Tuesday that every decision on CSR spending is a decision driven by the board of a particular company.
"A company and its board take a call on how much to spend, where to spend. So it is not a decision in which we can enter in and say, you have to spend here this much," the minister said.
She was responding to supplementaries by BJP member Bhim Singh during Question Hour about low CSR expenditure in Bihar.
The total CSR expenditure in Bihar during 2021-22, 2022-23 and 2023-24 fiscal years stood at Rs 680.91 crore by 854 companies.
Sitharaman told the Bihar member to keep talking to different companies and impress upon them the need for getting money to be spent in Bihar.
The minister said at best the ministry can only request to take a couple of socially important projects in Bihar but that is not "really lawfully tenable".
Intervening, Rajya Sabha Chairman C P Radhakrishnan asked whether norms could be changed so that underdeveloped states can benefit from CSR funds.
To this, Sitharaman said, "As a chairman, you have said it. I can take it as a suggestion and see what best I can do."
According to a written reply, penalties of Rs 2.97 crore were imposed on six companies in 2022-23. In 2023-24, 11 companies were penalised with Rs 3.32 crore and during 2024-25, 13 firms faced penalties of Rs 13.65 crore.
"The legal framework for CSR is provided through Section 135 of the Companies Act, 2013, Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. Section 135 (7) of the Act specifies the provision for penalty in case of default of CSR obligation by the company," she said in the reply.
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In case of default, a company as well as officer in default, will be liable to a penalty.
"Whenever violation of CSR provisions is reported, action against such non-compliant companies is initiated as per provisions of the Companies Act, 2013, and rules made thereunder after due examination of records and following due process of law," she said.
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