Why is the central Government against states mobilising corporate CSR funds for eligible social action?

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This pertinent question arises because of a historical clarification issued by the BJP Central government in the recent past. The controversial circular issued by the Ministry of Corporate Affairs that designated the PM CARES fund as eligible to receive CSR funds and the chief minister’s relief funds as not eligible for such expenditure.

Tamil Nadu has collected over 400 crores through this route for purposes well within defined activities that fall within CSR objectives. The central government may not be amiable to such independence especially as it feels that these funds could have been garnered for the PM cares fund. The recent allegation of scams that surround the PM funds make the corporates more comfortable to fund social causes that are within their purview to monitor and directly benefit local communities better.

A simple reading of the The Companies Act, 2013, shows that it mandates that the private sector discharge a sense of social responsibility.The Schedule VII of the Companies Act lists out the various activities that are eligible for CSR funds from industry, and it is well within the duty of states to tap these resources. 

TAMIL NADU CSR FUNDS DOBATED TO CHIEF MINISTERS RELIEF FUND

To put any apprehension to rest, it is only logical that the chief minister’s relief fund, established by state, is only fulfilling its duty and obligation to its citizens as long as the funds are utilised for activities under Schedule VII of the Companies Act, 2013, and attract no cause for concern and are fully eligible for CSR funding by corporates to be accordingly accounted by them.

 

It is oly hoped that corporates will help to monitor the spend and projects so that communities that deserve really benefit. Only that level of heightened commitment to social causes by corporates can ensure that false allegations of quid pro que donations are not made theafter. One way of doing this would be to have a joint mechanism with the government in place to make public awareof utilisation of these CSR sourced funds and ensure public acceptance.

 

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