Karnataka plans CSR policy, aims CSR funding
Karnataka plans CSR policy – BENGALURU (CSR in India): According to MTB Nagaraj, minister of public enterprises, the government would draught a policy requiring public sector units (PSUs) to set aside 2% of profits as corporate social responsibility (CSR) funds.
Nagaraj said the government will soon introduce a law to ensure CSR monies are used for local needs in response to questions from the legislative council about how PSUs in the state are spending CSR funding. “At the moment, there are no laws dictating how PSUs should spend CSR cash,” stated the minister. “PSUs registered under the Companies Act 2013 must set aside 2% of profits as CSR money, according to the Act’s rules.” “Sick units are not required to set aside funds for CSR.”
In Karnataka, there are 60 PSUs under 23 distinct departments. In response to a question from MLC KA Tippeswamy, the minister noted that 34 PSUs have shown profits, while the other 24 are inactive or facing bankruptcy proceedings.
Companies must spend at least 2% of their average profit over the previous three financial years on a CSR policy each year, according to the Companies Act. When spending the fund, the corporation must give precedence to the local region where it operates, according to the rules.
Karnataka plans CSR policy
“Many community halls were erected with CSR monies, but they are barely used,” KT Srikantegowda said, citing a lack of rules on how CSR funds should be used. The government must create a policy outlining how the cash can be spent.
Tippeswamy, who was speaking about the financial state of PSUs, claimed that some have paid over Rs 2 crore in taxes without making correct assessments. PSUs, he claims, have no internal regulation on how CSR funding can be spent. “Public sector undertakings must have a CSR strategy, and the government must publish local area development guidelines,” he stated.
He stated that the government will take action against public sector companies that do not spend the required 2% of profits on CSR efforts. “Directions will also be given to administrative departments. “We will establish a CSR policy,” he continued.
Mr. Thippeswamy had earlier stated, quoting from the Minister’s response, that 34 of the 60 public sector firms were profitable. “Some businesses that are losing money are being liquidated. Some of the profitable businesses are managed by administrative departments, while others are managed by the public enterprises department.” However, he noted that many businesses do not have a CSR policy in place, and that the government should establish standards requiring these businesses to spend 2% of their profits on CSR efforts.
Read more CSR India news on India Frontline.