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CBI can probe FCRA violations over ₹5 cr.


Mains Paper 2: Polity | Statutory, regulatory & various quasi-judicial bodies.

From UPSC perspective, the following things are important:

Prelims level: Foreign Contribution Regulation Act (FCRA), CSR

Mains level: Various investigating agencies in India and their work domain


Powers of CBI

  1. The CBI has submitted before Delhi High Court that cases of alleged Foreign Contribution Regulation Act (FCRA) violation involving more than ₹5 crore can be referred by the government to the agency for a probe
  2. There is a notification under the Act to this effect
  3. The case in which submission has been made refers to misuse of CSR money


Corporate social responsibility (CSR)

  1. Corporate Social Responsibility (CSR) is referred as a corporate initiative to assess and take responsibility for the company’s effects on the environment and impact on social welfare and to promote positive social and environmental change
  2. The CSR provision requires affected companies to spend at least 2 percent of their average net profits made in the preceding three years on CSR
  3. This was brought into effect by Companies Act, 2013
  4. Companies will be able to develop their own social investment strategies and decide where to invest and implement programs, but the government has recommended particular areas of need, including eradicating hunger and poverty, maternal and child health, HIV, TB, and malaria, promoting gender equality and environmental sustainability
  5. If a company does not conduct its own CSR, it can give the required amount to the government’s socio-economic welfare programs such as the Prime Minister’s National Relief Fund

Reliance Industries tops CSR spending chart: Govt

  1. Background: The new Companies Act mandates every company with a net worth of Rs. 100 crore to set aside minimum 2% of their 3-year average annual net profit for CSR activities
  2. News: Reliance Industries is the top company in terms of CSR, having spent over Rs. 760 crore
  3. A total of 460 listed firms have so far disclosed spending Rs. 6,337.36 crore in 2014-15
  4. Sectors: Most of the funds were spent on education or vocational skills, eradicating hunger, poverty and healthcare, clean Ganga Fund, Swachh Bharat Kosh, promotion of sports, art and culture

Tribal pockets around Mumbai report diversion of CSR funds

There are complaints of leakages and corruption at the village and taluka level, especially in tribal region on the city’s periphery.

  1. The panchayat officials siphoned off the money with the help of the engineers.
  2. There is very little monitoring of CSR funds in the village areas, and the system must be improved by various auditing mechanisms.
  3. Activists alleged that there is a absence of sustained funding from the govt for local works.
  4. They say that CSR activities are a much-needed relief to complete smaller projects in the area.

What is CSR?

  1. Corporate Social Responsibility is a voluntary act of giving back to society, on part of corporates.
  2. It is very different from philanthropy or charity, which are only acts of giving from income earned.
  3. CSR is an act of giving as part of having taken away something from society.
  4. Under the new Companies Act, a certain class of profitable companies must spend every year at least 2% of their average net profit over the preceding 3 years on CSR.

BSE-listed companies spend $1 billion on CSR

  1. Nearly 1,200 companies listed on the BSE together spent Rs.6,400 crore towards corporate social responsibility activities in 2014-15.
  2. Almost 55% funds were channelised to education, skills, livelihoods, health and sanitation.
  3. It added that more than 90% of the 1,181 companies complied with CSR norm.
  4. Almost 52% companies spend less than 2% requirement, as most firms lost time in understanding this complex legislation or not finding the right projects or implementing agencies.

NPCIL and its Corporate Social Responsibility

  1. NPCIL is a PSE under the Department of Atomic Energy.
  2. Responsible for design, construction, commissioning and operation of nuclear power reactors.
  3. At Tarapur, NPCIL provides emergency equipments for medical care.
  4. Survey of Ganga dolphins at Narora plant in association with the WWF.
  5. As a part of Environmental Stewardship Programme – NPCIL published 2 books – “Our Flying Guests” & “7 Edens and 70 Fairies” on the birds & butterflies of Indian NPPs.

Budget cuts make govt turn to PSUs for funding conservation initiatives

  1. Central Idea – Developing partnerships and funding conservation initiatives under Corporate Social Responsibility.
  2. Schemes up for adoption – In total 14 endangered species put up for the CSR bid.
  3. Snow leopards for Rs 35 crore, gharials for Rs 80 crore, whale sharks for Rs 10 crore and black-necked cranes for Rs 5 crore.
  4. Great Indian bustards going for Rs 104.5 crore and Olive Ridley turtles for a meager Rs 4.60 crore.

What qualifies as CSR and what does not?

  1. The 2013 companies law directs firms to spend at least 2% of their average 3-year net profit on CSR activities every year.
  2. But CSR activities should exclude activities undertaken in normal course of business.
  3. The government is not in favour of tax benefits for CSR expenditure because that is akin to subsidizing.
  4. Yet, contribution to the PM’s relief fund receives 100% tax rebate, and contribution to registered charities, foundations, etc., gets 50% rebate.

Kamadhenu – a CSR initiative

  1. As part of a CSR initiative, Oil India has signed an agreement with IRMA to carry out a feasibility study to set up dairy production in Assam.
  2. Project is called Kamadhenu.

:( We are working on most probable questions. Do check back this section.

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