It seems state-run companies are either sitting over-ambitious targets for corporate social responsibility (CSR) or it's their financial compulsions that they end up spending less towards CSR.

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Central public sector enterprises (CPSE) have significantly underutilised their CSR funds, with government data showing that nearly 43 percent of the funds allocated by these PSUs in the financial year 2018 remained unspent.

According to data furnished by the Ministry of Heavy Industries and Public Enterprises, a total of 152 central public sector units (PSUs) spent only Rs 3,442.38 crore out of the allocated funds of Rs 6,024.81 for CSR in FY 2017-18, leaving rest of Rs 2,582.43 crore untouched.

On a year-on-year basis, the CSR funding by CPSEs increased by a mere 3.17 percent, although the funds allocated increased by 18.17 percent. In the financial year, 2016-17 PSUs spent Rs 3,336.50 crore, against the allocated amount of Rs 4,929.70 crore.

Some of the major state-run companies did not utilise around 50 percent of their funds, or even more, with one of the major names being Oil and Natural Gas Corp Ltd (ONGC), which spent only around 25 percent of its allocated amount in 2017-18.

The data showed that ONGC spent Rs 503.44 crore on CSR during the year, out of the Rs 2,017.71 crore allocated by the company for the fiscal. However, with an expenditure of Rs 503.44 crore, the Maharatna company spent the most on CSR among the central PSUs.

Further, during the period under review, Power Finance Corporation (PFC) spent Rs 118.18 crore on CSR, only 47.38 percent of the total allocation of Rs 249.41 crore. Power Grid Corporation of India spent Rs 157.99 crore, 56 percent of its allocated fund of Rs 281.32 crore.

Similarly, Bharat Petroleum Corporation Ltd (BPCL), which is currently making headlines over the government's disinvestment plans, left 46.54 percent of its CSR funds unutilised in FY18. It spent Rs 166.02 crore, out of the total fund of Rs 310.56 crore.

On the other hand, Bharat Electronics left a staggering 64 percent of its Rs 68.20 crore fund unused. It spent Rs 24.60 crore only, on social responsibility in FY18. Electricals major BHEL (Bharat Heavy Electricals Ltd), reported an actual expenditure of Rs 33.16 crore, out of the allocated amount of Rs 64.30 crore during the year.

"It's not that PSUs are unwilling to make their CSR spending, but often they are left with limited avenues to spend or have to wait for CSR projects to shape up," said an executive of a Maharatna PSU.

The government on its part has also expanded the definition of CSR to maximise avenues where corporate funding could come. It has also made it mandatory upon companies to deposit unspent CSR money into a fund that should be spent within a period of three years.

Another PSU with a significant lagging in the CSR front was Indian Renewable Energy Development Agency. Although it had allocated Rs 24.14 crore for FY18, it spent only 3.61 crore of the fund, leaving the rest 85 percent unutilised. In the same way, Housing and Urban Development Corporation Ltd (HUDCO) spent just Rs 12.29 crore out of its fund of Rs 22.89 crore.

Hydel power major, NHPC and NHDC, a joint venture of NHPC and the Madhya Pradesh government, underspent their CSR fund for fiscal 2018-19 by 35.23 percent and 52.50 percent respectively, as per the data.

Under the Companies Act, 2013, a certain section of profitable companies have to shell out at least two percent of their three-year annual average net profit for CSR activities in a particular fiscal. To qualify the company must have a net worth of Rs 500 crore or more, or an annual turnover of Rs 1000 crore or more, or net profit of Rs 5 crore or more. If a company is not able to spend the required amount, it has to clarify the same to the government.

Businesses can invest their profits in areas such as education, poverty, gender equality, and hunger as part of any CSR compliance.

Contrary to the larger trend, there were a few companies which exhausted their CSR fund in FY18 or even overshot the allocated fund. Among them, the major names are Coal India, NTPC, Oil India and Indian Oil Corp.

Coal India and Indian Oil fully utilised their respective allocated fund of Rs 24.31 crore and Rs 331.05 crore.

Oil India, on the other hand, spent Rs 100.78 crore on CSR in FY18, against its allocated fund of Rs 61.76 crore.

NTPC, too overshot its allocated fund and spent Rs 241.54 crore, against the allocation of Rs 220.75 crore, the data showed.

According to recent CSR amendments introduced under the Companies Act, companies are required to deposit the unspent CSR funds into a fund within the end of the fiscal year. This amount must be utilized within three years from the date of transfer, failing which the fund must be deposited into one of the specified funds.

The new law also prescribes for a monetary penalty as well as imprisonment in case of non-compliance. The government, however, is reviewing these rules after the industry objected to the strict provisions, especially with respect to the jail terms for CSR violations, and is yet to operationalize them.