CSR spending trebles, Punjab still lags behind
Punjab, which saw its corporate social responsibility (CSR) funds treble in the last five years, lags far behind other major states when it comes to benefitting from the corporate charity.
(Intro) In 2022-23, state got ₹247.57 cr, far less than Maharashtra’s ₹5,497 cr, Gujarat’s ₹2,008.42 cr and several other states
Punjab, which saw its corporate social responsibility (CSR) funds treble in the last five years, lags far behind other major states when it comes to benefitting from the corporate charity.
The border state received CSR funds totaling ₹947.21 crore between financial years 2018-19 and 2022-23, which is a measly 0.74% of the ₹1.28 lakh crore spent by public and private sector companies on corporate social responsibility activities during this period, according to state-wise data collated by the Union ministry of corporate affairs from annual filings made by companies. Maharashtra, Gujarat, Karnataka, Tamil Nadu, Telangana, Andhra Pradesh, Delhi, Odisha, Rajasthan and Uttar Pradesh have been the biggest beneficiaries.
The annual CSR expenditure by India Inc in Punjab has also gone up from ₹88.51 crore in 2017-18 to ₹247.57 crore in 2022-23 due to efforts to reach out to corporates to support activities and projects in education, health and environment sectors. The Punjab government had established a CSR Board under the chief minister as well as a CSR Authority during the previous government to decide on projects and funding proposals.
‘Concerted efforts for more CSR funds’
Punjab CSR Authority chief executive officer (CEO) and director, industries and commerce, DPS Kharbanda said the government has been making concerted efforts to get companies to spend their CSR funds in Punjab. “We have identified 15-20 major companies and reached out to their top managements for support in various development sectors. I plan to hold one-on-one meetings with them next month. The deputy commissioners have also been asked to identify areas where they need CSR funds,” he said.
However, the share of Punjab is nowhere close to most other major states. Maharashtra, Gujarat and Karnataka received ₹5,497 crore, ₹2,008.42 crore and ₹1,985.82 crore, respectively, in FY23. Neighbouring states of Rajasthan and Haryana have also done better than Punjab in attracting corporate social responsibility funds.
Dr Sandeep Goyal, former CEO of Punjab CSR Authority, said the state was not able to get its fair share of CSR funds because not a single NSE or BSE top 100 company was headquartered in Punjab. “Companies prefer states where they are headquartered or have their major units. Also, the bureaucracy in the state seemed to lack the intent and commitment required for such efforts,” said the adman-turned-entrepreneur who served as the CEO for close to two years during the previous government. An IAS officer, who closely followed CSR activities for more than one year, said that some big companies in Punjab were also spending bulk of their funds outside the state.
5 districts cornered most CSR funds
Out of ₹247.57 crore spent by private and public companies in 2022-23, 70% went to just five of the 23 districts in the state. Ludhiana and SAS Nagar, which are home to some of the top companies in the state, were the top CSR beneficiaries and got ₹60 crore and ₹54 crore, respectively. Bathinda, Amritsar and Sangrur also received funds for welfare works and projects, while Muktsar, Tarn Taran, Fazilka, Pathankot, Malerkotla, Barnala and Moga got meagre amounts or nothing from CSR funds, according to district-wise data available from the Union ministry of corporate affairs.
Among the activities allowed under CSR, education, differently-abled, livelihood sector got the maximum ₹112.63 crore, followed by health, eradicating hunger, malnutrition and safe drinking water with ₹79.41 crore and environment, animal welfare, conservation of resources sector ₹30.4 crore. A sum of ₹8.22 crore was spent on gender equality, women empowerment and old age homes, while only ₹8 lakh was spent on slum development. In FY23, HPCL-Mittal Energy Limited was the top spender with ₹16.51 crore, whereas HDFC Bank and Havells India Limited spent ₹14.71 crore and ₹13 crore, respectively.
According to the Companies Act, 2013, companies with a net worth of at least ₹500 crore, turnover of more than ₹1,000 crore, or a net profit of ₹5 crore or more are required to spend 2% of their average profits during the three immediately preceding financial years on CSR activities. The law empowers the board of the company to decide the activities to be undertaken and the area for implementation of the CSR projects.