New Delhi: A parliament question this week appears to have unwittingly exposed how public sector undertakings drop a project the moment a minister changes.
A question was asked in the Rajya Sabha on corporate social responsibility expenditure by oil PSUs in Odisha for the past five years.
Union education minister Dharmendra Pradhan was the Union minister for petroleum and natural gas from 2014 to 2021.
During his tenure, oil PSUs made a beeline for Odisha with a total of nine PSUs spending Rs 350 crore in 2019-20 alone.
The next year, there was a sharp dip in CSR funds spent. Rs 91.66 crores were spent by oil PSUs for Odisha. It is not known whether this was on account of funds being diverted to the PM Cares fund that was set up in March 2020 or the lockdown on account of COVID-19.
The minister continued to wield influence on his PSUs because the spending was back in full throttle at Rs 114 crore in 2021-2022.
Pradhan was a Rajya Sabha MP – i.e. not a directly elected leader – as petroleum minister, but that did not reduce his clout in funnelling funds for his political base in Odisha.
In July 2021, Pradhan exited the petroleum ministry. The financial year 2022-2023 saw the oil majors spend Rs 39.8 crore for Odisha, a nearly nine-fold decline from its peak of 2019-2020.
The last fiscal, 2023-2024, saw a further fall at Rs 34.5 crore being spent.
A screengrab of the parliament question.
Pradhan moved to the skill development ministry in July, 2021. In August 2021, he inaugurated a Skill Development Institute Bhubaneswar at Jatni in Khordha district at a cost of Rs 300 crore. The project had funded by various oil PSUs through their CSR funds.
Section 135 of the Companies Act 2013 mandates 2% of the average net profit of the company of the preceding three financial years be spent towards CSR.
In 2021, several members of parliament wanted to know from the government whether an elected leader or government official can recommend their constituencies to companies to carry out CSR projects.
The response had always been that the government has no role.
Rao Inderjit Singh, the Minister of State for Corporate Affairs, said in parliament, quoting the CSR FAQ board, “CSR is a Board driven process and the Board of the company is empowered to plan, decide, execute and monitor CSR activities based on the recommendation of its CSR committee. The government does not issue any specific direction to the companies to spend in any particular activity or area.”
Minister of State for Finance and Corporate Affairs, Anurag Thakur, had said during question hour in Rajya Sabha that the Companies Act clearly spells out where all CSR funds can be spent. “I want to say the funds are not used for implementing the government schemes… There should not be a myth that CSR funds are used for implementing government schemes. The government makes adequate funding for various programmes,” he had said.
Politicians have often been pushing for removing 2% cap on CSR spending by corporates and BJP MP Vinay Sahasrabuddhe even moved a private members’ Bill in 2021 to allow for the spending of 25% CSR funds for the maintenance of historic monuments. The Bill was later withdrawn.
