Review of CSR - Corporate Social Responsibility Initiatives by top PSU's - Public Sector Undertakings of India.

CSR- Corporate Social
Responsibility
initiatives by the top
profitable PSU’s –
Public Sector
Undertakings of India
Dr. Jagbir Singh Kadyan
Asst. Professor, Dept of Commerce,
Swami Shraddhanand College,
University of Delhi, India.
Dr.jskadyan@gmail.com
1
Dr. Jagbir Singh Kadyan, University of Delhi,
India.

Abstract:
This research paper is an empirical
study focusing on the CSR – Corporate
Social Responsibility initiatives
undertaken by the top profitable PSU –
Public Sector Undertaking of India for
the year 2017-18. An attempt has been
made to know about the said PSU, its
key CSR policy, CSR initiatives
undertaken and the different sectors of
Indian economy in which they have
focused their CSR efforts.
2
India.

Corporate
Social
Responsibility
in India
As per Section-135 of Companies Act,
2013, all profit making corporates,
including Central Public Sector
Enterprises (CPSEs) exceeding threshold
limits prescribed in the Act regarding
net worth of Rs. 500 crore, or turnover
of Rs. 1000 crore or net profit of Rs. 5
crore in pursuance of its CSR Policy are
mandated to spend at least 2% of the
average net profits (Profit Before Tax) of
the company made during the three
immediately preceding years for
undertaking CSR activities as per items
listed in Schedule-VII of the Act.
3
India.

Public Sector
Undertakings
(PSUs)
• PSUs are the government owned
corporations in India. In a PSU majority
(51% or more) of the paid share capital
is held by central government or by any
state government or partly by the
central government and partly by one or
more state governments. The three
PSUs selected for the study are as
under.
• NTPC – National Thermal Power
Corporation Ltd.
• IOC – Indian Oil Corporation Ltd.
• ONGC – Oil and Natural Gas Corporation
Ltd.
4
India.

About NTPC - National Thermal Power Corporation Ltd
5
India.

NTPC
NTPC is India’s largest power utility with
an installed capacity of 55,786 MW
(including JVs), plans to become a 130
GW company by 2032. Established in
1975, NTPC aims to be the world’s
largest and best power major.
Focus areas of the Company’s CSR &
Sustainability activities are Health,
Sanitation, Safe Drinking Water,
Education, Capacity Building, Women
Empowerment, Social Infrastructure
livelihood creation and support through
innovative agriculture & livestock
development, support to Physically
Challenged Person (PCPs) and activities
contributing towards Environment
Sustainability.
6
India.

NTPC
• The Company spent Rs. 241.54 Crore
during the financial year 2017-18
towards CSR initiatives, which surpassed
the prescribed two percent amount of
Rs. 220.75 Crore
7
India.

Indian Oil Corporation Ltd.
India.
8

About IOC
• Indian Oil Corporation Ltd (IOCL) is
India's flagship national oil company
with business interests straddling the
entire hydrocarbon value chain - from
refining, pipeline transportation and
marketing of petroleum products to
exploration & production of crude oil &
gas, marketing of natural gas and
petrochemicals.
• Indian Oil has been actively engaged in a
gamut of social welfare/ upliftment
activities across the nation, in addition
to reaching essential fuels viz. Kerosene,
LPG, petrol, diesel, etc. to every nook
and corner of the country.
9
India.

About IOC
• IndianOil’s key Corporate Social
Responsibility (CSR) thrust areas include
safe drinking water and protection of
water resources, healthcare and
sanitation, education and employment-
enhancing vocational skills,
empowerment of women and
socially/economically backward groups,
etc.
• The CSR projects of IndianOil are mostly
undertaken in the vicinity of its
establishments for improving the quality
of life of the community, which
invariably includes marginalized groups
belonging to the under-privileged
section of the society, viz. SCs, STs, PHs,
OBCs, etc.
10
India.

About IOC
• IndianOil has a long standing CSR legacy,
which started much before the CSR
legislation (Companies Act, 2013) came
into force in 2014-15. For the year 2017-
18, the entire budget allocation of
`331.05 crore was spent on CSR
activities, thereby achieving 100%
budget utilization.
11
India.

ONGC Ltd.
India.
12

ONGC – Oil and
Natural Gas
Corporation Ltd.
• ONGC Corporate Profile - The Largest
Energy Company in India. This Central
Public Sector Enterprise Represents
India's energy security through its
pioneering efforts. ONGC is India’s
largest oil and gas producer,
contributing around 70 per cent to
Indian domestic production & has been
ranked 160 in the coveted Fortune
Global 500 list 2019.
• As stipulated in the Section 135 of the
Companies Act 2013, the company has a
Board Level Committee on CSR namely
CSR and SD Committee, who has
approved 19 major CSR projects
amounting to Rs.2,600 million in FY’18.
ONGC had more than 100% utilization of
CSR budget amounting to Rs.5,034
million against the budget of Rs. 4,870
million.
13
India.

ONGC
• Expenditure of Rs5,034 million was
made possible by implementing and
executing more than 2400 CSR projects
/ programs in the areas of Swachhta,
Health, Education, Environment, Skill
Development and Vocational training by
Corporate CSR and 24 work centres of
the Company.
• The Company has undertaken number
of flagship initiatives under Swachh
Bharat Abhiyan, with an expenditure of
Rs1,844.6 million. An amount of
Rs.1,320.3 million was spent towards
implementing projects on promoting
education, livelihood and skill
development.
14
India.

ONGC
• Another, Rs 1,307.9 million was spent
towards creating health Infrastructure
and on preventive health care
programs/projects. Rest of the
expenditure was towards implementing
projects related to environment
sustainability, women empowerment,
sports, rural development, capacity
building, etc.
15
India.

SCHEDULE VII,
Companies Act
2013,
( Section 135)
• Schedule Vii of the companies Act 2013
form the basis for the spending on CSR
by the company. The entire CSR
programme of the company had to be
based on it. Activities which may be
included by companies in their
Corporate Social Responsibility Policies
Activities relating to:—
16
India.

I. 1[Eradicating hunger, poverty and
malnutrition, 2[‘‘promoting health care including
preventive health care’’] and
sanitation 4[including contribution to the Swach
Bharat Kosh set-up by the Central Government
for the promotion of sanitation] and making
available safe drinking water.
II. Promoting education, including special education
and employment enhancing vocation skills
especially among children, women, elderly and
the differently abled and livelihood enhancement
projects.
III. Promoting gender equality, empowering women,
setting up homes and hostels for women and
orphans; setting up old age homes, day care
centres and such other facilities for senior citizens
and measures for reducing inequalities faced by
socially and economically backward groups.
IV. Ensuring environmental sustainability, ecological
balance, protection of flora and fauna, animal
welfare, agroforestry, conservation of natural
resources and maintaining quality of soil, air and
water 4[including contribution to the Clean Ganga
Fund set-up by the Central Government for
rejuvenation of river Ganga].
V. Protection of national heritage, art and culture
including restoration of buildings and sites of
historical importance and works of art; setting up
public libraries; promotion and development of
traditional art and handicrafts;
17
India.
SCHEDULE VII, Companies
Act 2013, ( Section 135)

vi. Measures for the benefit of armed
forces veterans, war widows and their
dependents;
vii. Training to promote rural sports,
nationally recognized sports,
Paralympics sports and Olympic sports
viii. Contribution to the prime minister's
national relief fund or any other fund
set up by the central govt. for socio
economic development and relief and
welfare of the schedule caste, tribes,
other backward classes, minorities
Contributions or funds provided to
technology incubators located within
academic institutions which are
approved by the s and women;
ix. central govt.
x. Rural development projects
xi. 3[slum area development.
xii. [Disaster management, including
relief, rehabilitation and
reconstruction activities.]
18
India.
SCHEDULE VII,
Companies Act 2013,
( Section 135)

CORPORATE
SOCIAL
RESPONSIBILITY
AMONG CPSEs
• During the year 2017-18, 153 CPSEs
have spent Rs. 3442.42 Crore on CSR
activities. However, 2% of PBT for these
CPSEs was Rs. 3693.47 Crore. The
break–up CSR Expenditure based on
various activities for the year 2017-18
has been given in the table 5.11 and
graph.
19
India.

Sl. No. Sectors Actual Expenditure
Rs in Crore
1 Eradicating Hunger and Poverty, Health Care and
Sanitation
1119.34
2 Education and Skill Development 1112.65
3 Empowerment of Women and other Economically
Backward Sections
66.14
4 Environmental Sustainability 393.47
5 Art & Culture 244.32
6 Armed Forces welfare 8.50
7 Sports 64.98
8 Contribution to funds setup by Central Government 50.92
9 Contribution to Technology Incubators 0.36
10 Rural Development 374.68
11 Slum Area Development 7.06
12 TOTAL 3442.42
[1] Public Enterprise Survey2017-18
20
India.

CPSE
Name
Average
PBT for
last 3
Years
2%
Average
PBT for
last 3
Years
Amount Allocated
for CSR (Including
the Carried forward,
if any).
Actual
CSR
Spent
Unspent
CSR
NTPC 11176.77 223.54 220.75 241.54 0.00
IOC 17047.69 340.95 331.05 331.05 0.00
ONGC 25123.19 502.46 2017.71 503.44 1514.27
21
India.
[1] Public Enterprise Survey2017-18

Data Analysis
&
Interpretations
• The top three Indian profit making PSU’s
for the year 2017-18 were selected for
this research paper. NTPC- National
Thermal Power Corporation; IOC- Indian
Oil Corporation; and ONGC- Oil &
Natural Gas Corporation. The trend
analysis is based on the actual data
compiled from the annual financial &
CSR reports of the respective
companies. Even though CSR is
mandatory for the select companies
wef., financial year 2013-14, The
selected three PSU’s were not able to
present the concern csr data in the
prescribed format/ manner, maybe due
to the transitory phase / evolutionary
phase of CSR in India. Therefore, the
period of this research paper is confined
to three years starting from 2015-16 to
2017-18.
22
India.

Trend Analysis: Budgeted Components Vs Total Budget
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
i ii iii iv v vi vii viii ix x xi xii Others
Budegted CSR 2015-16
NTPC IOC ONGC
23
India.

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
NTPC IOC ONGC
24
India.

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
NTPC IOC ONGC
25
India.

• During the year 2015-16, NTPC had budgeted
allocation of CSR Funds towards 04 items only
from the total 12 items of schedule VII of the Co
act 2013. The highest CSR budgeted allocation
of 54% was done for item no. i, while the lowest
allocation of 10% was done towards item no. x.
Similarly, an allocation of 3% was found to done
towards an item mentioned as “others”, which
does not constitute to be a part of schedule vii.
• During the year 2016-17, the Co had
increased the budgeted allocation of CSR Funds
towards 06 items from the total 12 items of
schedule VII of the Co act 2013. The highest CSR
budgeted allocation of 29% was done for item
no. i, while the lowest allocation of 1% each was
done towards item no. v & vii. Similarly, an
allocation of 6% was found to done towards an
item mentioned as “others”, which does not
constitute to be a part of schedule vii.
26
India.

During the year 2017-18, the Co had budgeted
allocation of CSR Funds towards 06 items from the
total 12 items of schedule VII of the Co act 2013.
The highest CSR budgeted allocation of 31% was
done for item no. i, while the lowest allocation of
1% each was done towards item no. vii. Similarly,
an allocation of 1% was found to done towards an
item mentioned as “others”, which does not
constitute to be a part of schedule vii.
27
India.

Trend Analysis: CSR Spent Component Vs Total spent
0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
65%
70%
CSR Spent 2015-16
NTPC IOC ONGC
28
India.

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
CSR Spent 2016-17
NTPC IOC ONGC
29
India.

0%
5%
10%
15%
20%
25%
30%
35%
40%
45%
50%
55%
60%
CSR Spent 2017-18
NTPC IOC ONGC
30
India.

• During the year 2015-16, NTPC had spent
budgeted allocated CSR funds towards 05 items
only from the total 12 items of schedule VII of
the Co act 2013. The highest CSR spending of
67% was done towards item no. i, while the
lowest spending of 1% was done towards item
no. v. Similarly, a spending of 5% was found to
done towards an item mentioned as “others”,
which does not constitute to be a part of
schedule vii.
• During the year 2016-17, NTPC had spent
budgeted allocated CSR funds towards 05 items
only from the total 12 items of schedule VII of
the Co act 2013. The highest CSR spending of
36% was done towards item no. i, while the
lowest spending of 1% was done towards item
no. vii. Similarly, a spending of 10% was found
to done towards an item mentioned as
“others”, which does not constitute to be a part
of schedule vii.
31
India.

• During the year 2017-18, NTPC had
spent budgeted allocated CSR funds
towards 06 items only from the total 12
items of schedule VII of the Co act 2013.
The highest CSR spending of 27% was
done towards item no. ii, while the
lowest spending of 1% was done
towards item no. vii. Similarly, a
spending of 5% was found to done
towards an item mentioned as “others”,
which does not constitute to be a part
of schedule vii.
32
India.

Over /
Under
Spendings
on CSR
Co 1 NTPC:
• During the year 2015-16, NTPC had made
budgeted allocations of CSR funds towards five
items only of the schedule VII of the Co act 2013.
Out of which the Company actually overspent on
two items, namely, no. i & others by 12% and 2%
respectively. Similarly, the Company actually
underspent on three Items nos. ii, iv & x by 7%, 6%
& 1% respectively.
•
budgeted allocations of CSR funds towards seven
three items, namely, no, i, x & others by 7%, 4%
and 4% respectively. Similarly, the Company
actually underspent on two Items namely, nos. ii &
iv by 7%, 6% & 1% respectively.
•
budgeted allocations of CSR funds towards seven
three items, namely, no, ii, iv & Others by 10%, 1%
and 4% respectively. Similarly, the Company also
actually underspent on three Items namely, nos. i,
vii & x by 6%, 1% & 8% respectively.
33
India.

Co 2 IOC:
• During the year 2015-16, IOC had made budgeted
allocations of CSR funds towards four items only of
the schedule VII of the Co act 2013. Out of which the
Company actually overspent on two items, namely,
no. ii & iv by 4% and 13% respectively. Similarly, the
Company also actually underspent on two Items,
namely, nos. i& iii by 14% & 3% respectively.
allocations of CSR funds towards four items only of
no, ii & v by 20% & 11% respectively. Similarly, the
Company also actually underspent on two Items
namely, nos. i & iv by 4% & 6% respectively.
allocations of CSR funds towards six items only of the
schedule VII of the Co act 2013. Out of which the
no, ii & v by 3% & 9% respectively. Similarly, the
Company also actually underspent on three Items
namely, nos. i, iv & others by 1%, 8% & 3%
respectively.
34
India.

• Co 2 ONGC:
• During the year 2015-16, ONGC had made budgeted
allocations of CSR funds towards nine items of the
Company actually overspent only on one items,
namely, no. x by 8%. Similarly, the Company actually
underspent on four Items, namely, nos. i, ii, v & vii by
5%, 16%, 1% & 1% respectively.
•
allocations of CSR funds towards seven items only of
Company actually overspent on five items, namely,
no, ii, iv, viii & others by 7%, 1%, 4%, 1% & 6%
respectively. Similarly, the Company also actually
underspent only on one Items namely, nos. i by 25%.
•
allocations of CSR funds towards nine items of the
no, iv & others by 1% & 6% respectively. Similarly, the
Company also actually underspent on four Items
namely, nos. i, iii, v, & vii by 4%, 1%, 1% & 1%
respectively.
35
India.

Findings & Conclusions:
Even though CSR is mandatory for the select companies wef., financial year
2013-14, The selected three PSU’s were not able to present the concern
csr data in the prescribed format/ manner, maybe due to the transitory
phase / evolutionary phase of CSR in India.
Education and skill development, Healthcare, Rural Development and
Environment sustainability formed the thrust areas for CSR projects.
Items nos. xi & xii, of schedule VII of companies act 2014, viz., Slum area
development. & Disaster management, including relief, rehabilitation and
reconstruction activities, has not been undertaken in their CSR program by
any of the companies under the study.
36
India.

It is observed that the CSR projects at IOC are executed either directly by
the company or through the implementing agency. Similarly, the company
has also formed a trust IOF– Indianoil foundation for the purpose of
protecting, preserving and promoting the glorious heritage monuments, in
collaboration with the Archaeological Survey of India (ASI) and the National
Culture Fund of the Ministry of Culture, Government of India. IOF is
exclusively funded by IOC with an initial corpus of Rs. 25 crore and an
annual contribution of Rs. 10 crore. IOF will adopt at least one heritage site
in every State and Union Territory of our country.
As per Rule 4(6) of CSR Rules 2014 Companies could build CSR capacities of
their own personnel as well as those of their Implementing agencies
through Institutions, with established track records of at least three
financial years but such expenditure, including expenditure on
administrative overheads should not exceed 5% of total CSR expenditure of
the company in one financial year. All the three Companies have exceeded
this norm at least once or in some cases twice during the period of study.
37
India.

As per Section 135(2) of the Companies Act, 2013, report of the Board on CSR,
should disclose the composition of the Corporate Social Responsibility
Committee. It is observed that all three CPSEs disclosed the required
information in their Board’s report.
As per Para 9 of the CSR Rules 2014, the Board of Directors of the Company
should disclose contents of CSR policy in its report and the same should be
displayed on the company’s website. It is observed that all the three companies
have disclosed the contents of CSR Policy in their Board’s report.
As per Para 8 (1) of the CSR Rules 2014, the Board’s report of a Company,
should include an annual report on CSR in the prescribed format. It was found
that all the three selected companies have done the said compliance.
38
India.

Q & A ?
Thank You !
39
India.

Review of CSR - Corporate Social Responsibility Initiatives by top PSU's - Public Sector Undertakings of India.

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