47 profit-making CPSEs fail to comply with CSR norms: CAG

NEW DELHI: As many as 47 profit-making CPSEs failed to comply with the Corporate Social Responsibility (CSR) norms prescribed by the government in 2011-12, said CAG in its report tabled in Parliament today.

"Out of the total 110 CPSEs earning profit of more than Rs 10 crore, 47 CPSEs did not comply with the Department of Public Enterprises (DPE) norms in terms of the minimum CSR budget/expenditure. As such, the compliance was about 57 per cent only in terms of number of CPSEs," it said.

It said the compliance was not encouraging in case of Central Public Sector Enterprises (CPSEs) earning profit between Rs 10 crore and Rs 100 crore, as 30 out of 44 CPSEs did not comply with the guidelines, it added.

Under the new norms, which came into effect from April 1, 2013, PSUs with a profit of less than Rs 100 crore are required to contribute 3 per cent of their net profit for undertaking such activities and companies with income between Rs 100-500 crore are required to earmark 2-3 per cent.

"The compliance was not satisfactory in case of CPSEs earning profit between Rs 100 crore and Rs 500 crore, as 12 out of 27 CPSEs failed to comply with the minimum requirement of CSR budget/expenditure," the auditor said.

However, CAG said, the compliance was encouraging among large CPSEs which earned profit of more than Rs 500 crore as the shortfall was only in 5 out of 39 CPSEs and as many as 34 CPSEs spent/provided for CSR in excess of the minimum requirement.

As per the new guidelines, PSUs with a net profit of over Rs 500 crore in the previous year will have to earmark 1 per cent of it from the earlier level of 0.5 per cent for carrying out such activities. However, the upper limit of 2 per cent remains unchanged.

The norms also stated that CPSEs would be required to disclose the reasons for not fully utilising the budget for CSR for the same year.

Also, they state that if PSUs are unable to spend the earmarked amount for CSR in a particular year, it has to be spent in the next two years.

As on March 31, 2012, there were 260 CPSEs of which 225 were in operation and the rest were "under-construction".