The government will soon introduce a law requiring state-run public sector undertakings to make annual allocations under Corporate Social Responsibility (CSR), Small Scale & Public Enterprises Minister MTB Nagaraj said on Tuesday.
"There is no hard and fast rule that PSUs should set aside CSR funds. The new law will ensure that CSR funds are released every year by profit-making PSUs," Nagaraj said while replying to a question in the Legislative Council.
JD(S) MLC KA Thippeswamy noted that many PSUs did not have a clear policy on CSR grants. "The government should introduce a policy soon and ensure that CSR guidelines - as laid down in the Companies Act - are implemented," he said.
Most of the funds allocated under CSR are being used to build community halls, said MLC KT Srikantegowda, noting that a large number of them are in shambles as they are used.
"Though CSR funds should be used to benefit local communities, most of it is going to community halls. Government should come up with guidelines to ensure that these funds for used for other projects than just community halls," he said.
Nagaraj said that the government would look into the issue and ensure CSR funds are used in different sectors such as healthcare and sanitation.
The minister, in response to questions by Thippeswamy and Srikantegowda, said that of the 60 state-run companies, 34 are profit-making units while 24 others have either shut or are bankrupt.
Indian law mandates wealthy companies to spend at least 2 per cent of their average net profits of the previous three years on welfare activities.
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(Published 22 March 2022, 13:23 IST)
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