Govt tightens grip on CSR spending
Jharkhand has asked companies to hand over 50 per cent of their CSR budget to a council chaired by the chief minister with representatives from industry to target focussed spending on drinking water, sanitation and health, a deft move to ensure reluctant corporates fulfil their social obligations.
- Published 2.08.16
Ranchi, Aug. 1: Jharkhand has asked companies to hand over 50 per cent of their CSR budget to a council chaired by the chief minister with representatives from industry to target focussed spending on drinking water, sanitation and health, a deft move to ensure reluctant corporates fulfil their social obligations.
"Out of 2 per cent (of total profits in a financial year), companies need to submit 1 per cent with the governing council where they have representation too. The state government wants to streamline CSR spending," explained industries, mines & geology department secretary Sunil Kumar Barnwal after chief minister Raghubar Das chaired a meeting today of company representatives to outline the government's intentions on corporate social responsibility.
Headed by the chief minister, Jharkhand CSR Governing Council was announced last year. It has as members various government officials, namely, chief secretary, development commissioner and secretaries of various departments like industries, HR, energy, labour, drinking water & sanitation and rural development.
Among the companies that are a part of it are Tata Steel, JSPL, SAIL, Usha Martin, Central Coalfields (CCL), Bharat Coking Coal (BCCL), Eastern Coalfields (ECL), DVC and NTPC.
The state government, sources said, was also in favour of forming a special cell, comprising government/corporate and PSU representatives, to monitor CSR spending in targeted areas and suggest ways for better co-ordination so that there was no duplication, i,e. two companies ending up funding similar projects in one area.
According to sources, Das told the gathering that the government wanted to direct all CSR funding towards setting up piped drinking water supply in rural areas, sanitation and health.
He also said that the need of the hour was to construct at least 30 lakh toilets to ensure Jharkhand became an open defecation free (ODF) state.
"Barely 23 per cent of the population is covered under piped water supply schemes in rural areas of the state. In urban centres, it is over 50 per cent. The chief minister has asked for more focus on rural areas," said a senior government official who attended today's meet.
According to a senior member of Federation of Jharkhand Chamber of Commerce and Industry (FJCCI), most companies present at today's meeting did not oppose the suggestion of the government, but said that they would have to get a nod from their corporate headquarters.
"Since the CSR governing council includes government as well as corporate/PSU representatives, besides representation of CII and Unicef, company boards may not oppose the government's proposal. They ultimately have to spend two per cent of the profits," he said.
Sources said the government was looking at a total CSR spending of Rs 1,200 crore by companies operating in the state. "So, around Rs 600 crore should be available with the state CSR governing council to spend on the three identified heads," said a senior official.
Among the senior officials present at today's meeting were chief secretary Rajbala Verma, additional chief secretary-cum-development commissioner Amit Khare, chief minister's principal secretary Sanjay Kumar, health secretary K. Vidyasagar, drinking water & sanitation department secretary A.P. Singh and director (industries) K. Ravikumar.
Apart from representatives from industry, members of trade organisations like Confederation of Indian Industry (CII) and FJCCI, along with Unicef, were also present.