Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
Achieving
Strategic
fit
through
sustainable
societal development - A suggestive framework
for CSR measurement for PSUs
Abstract:
During the first five-year plan (1950-51 to 1955-56), there were only five CPSEs in the
country with a financial investment of INR290 million Since then they have grown to 260
CPSEs with a financial investment of INR7,292.3 billion as on March 31, 2013 (including
225 operating and excluding seven insurance companies). Public Sector Units (PSUs) in the
Indian economy accounted for $390 billion turnover in FY13 with a revenue growth of 11%
since 2009.
PSUs have been set up with the aim to achieve higher GDP growth, self-reliance in
production of goods and services, long-term equilibrium in balance of payments, and low
and stable prices. But the major crux lies in disseminating the socio economic responsibility
with the new mandates coming up with respect to CSR & SD (Corporate social
responsibility & Sustainable development)
As we are moving from the optional CSR to compulsory mode, it becomes mandatory to
understand the “what” and “Why” of targets and objectives of policy makers in this regard.
The Companies Bill (Clause 135) talks about the list of activities that may be included by a
company in its CSR policy. The bill does not prescribe the proportion of funds to be
contributed towards any activity. There is a need of proper mandate to allocate percentage of
funds to be a disbursed for a particular activity under CSR & SD. In absence of specific
measurement metrics, there are issues with the measurement of CSR efforts.
This paper attempts to propose frameworks for CSR measurement, Framework for system
based working of PSU, and framework for sustainable socioeconomic development of the
country as a whole.
Key
words:
CSR
(Corporate
Social
Responsibility),
CMR
(Corporate
Moral
Responsibility), CCSR (Critical Corporate Social Responsibility), SD (Sustainable
Development)
Word Count: 268
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
[1] Introduction: CSR has evolved from mere philanthropy to social responsibility. In the
recent years the role of CSR has developed significantly to have a positive impact on the
socially diverse areas of the community. In the current scenario, Broadly, companies view it
as a channel for using their businesses for addressing social and environmental concerns by
integrating CSR activities into their values and culture, thus, leading to social and economic
development of the country. Corporate social responsibility and sustainability is a
company’s commitment to its stakeholders to conduct business in an economically, socially
and environmentally sustainable manner that is transparent and ethical.
In his Arthashatra, Kautilya maintained that a king should have no self-interest, happiness
and joy for himself, his satisfaction lies in the welfare (happiness) of his people, i.e. he has
to submerge his personality into the larger personality of his people. This is based on the
cultural ethos of self-abnegation. Kautilya states in the happiness of his subject lies the
happiness of the king; and in their welfare lies his welfare. He shall not consider as good
only that which pleases him but treat as beneficial to him, whatever pleases his subjects.
Bahujana sukhaya bahujana hitayacha – the welfare of the many and the happiness of the
many. In fact, this concept of the happiness of the many need integrated into the area of
corporate management as the basic principle. Kautilya stressed the importance of happiness
to all stakeholders of an organisation. This also means that one must strive to generate
wealth – resources and money – share it equitably to create happiness for oneself and others.
CSR has evolved as a significant factor in the global business scenario. Today, the concept
of business has extended beyond the scope of existing as mere profit making entity. The
scenario has changed visibly from the traditional way of focusing on profitability to
fulfilling their social responsibility and contributing to the various stakeholders such as
investors, customers, employees, and community-at-large who are affected / impacted by
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
their actions. Keeping in mind the Growing competition and increasing globalization, the
companies are forced to redesign their strategies and business models to sustain over the
long term and CSR is expected to play an important role in the coming years.
CSR is closely linked with the principles of Sustainable Development which states that
enterprises should be obliged to make decisions based not only on financial/economic
factors (e.g. Profits, Return on Investment, dividend payments etc.) but also on the social,
environmental and other consequences of their activities. Companies have now recognized
the importance and immense benefits derived from implementation of a CSR strategy.
Consequently, CSR has become an integral part of today’s strategic business decisionmaking process, with the goal of adding value to the business and the community at large.
[2] Research Problem: As we are moving from the optional CSR to compulsory mode, it
becomes mandatory to understand the “what” and “Why” of targets and objectives of policy
makers in this regard. The Companies Bill (Clause 135) talks about the list of activities that
may be included by a company in its CSR policy. The bill does not prescribe the proportion
of funds to be contributed towards any activity. So there is a need of proper mandate to
allocate percentage of funds to be a disbursed for a particular activity under CSR & SD. At
present, the CSR activities of any PSU are directed in the areas where the respective PSU
have their projects implemented. The things are happening but one needs to check if they are
moving in the right direction and intent or not.
If one looks at the nature and place of activity, there is every reason to assume that focus and
clarity is missing amongst the PSUs and the collective synergized efforts are also missing.
Finally the budgets which are linked to current years profits, keep on changing. In most of
the cases budgets are increasing year after year. PSUs are puzzled over the expansion of
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
CRS effort, issue of dedicated human resource, and mechanism to measure the impact and
extent of CSR effort. There is no systematized prescribed framework for the same.
[3] Objectives: The paper is written with following objectives in mind.

To gain a perspective of the concept and the current status of CSR & SD activities in
Indian PSUs.

To design a framework for CSR measurement

To design a framework for system based working of PSU.

To design a framework for sustainable socioeconomic development of the country as
a whole.
[4] Current state of CSR in India:
 Priority of business is getting widened from 1 P to 3 Ps by inclusion of People and
Planet with Profit.
 Short-term, charity based welfare interventions are being replaced by long-term,
empowerment – based CSR.
 Based on the realization that business cannot succeed in a society that fails, CSR is
being considered as an imperative for carrying on business in the society rather than
as a charity.
 The new Companies bill passed by both Lok Sabha and Rajya Sabha mandates the
corporates to spend 2% of their average net profits of the last three financial years
towards CSR. This is applicable for companies with a turnover of 1000 Cr/ PAT of 5
Cr/ or net worth of 500 cr. The new bill replaces the Companies act 1956 and
emphasizes carrying forward the agenda of Corporate Social Responsibility.
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
 It is mandatory for Central Public Sector Enterprises to allocate 2-3% of the PAT for
the inclusive development of a backward district (CSR & Sustainability guidelines by
Department of Public Enterprises 2013), in which one key project has to be in CSR
and the other in Sustainability for the development of the disadvantaged and
marginalized communities.
CSR Importance and its Relevance Today:
CSR as a strategy is becoming increasingly important for businesses today because of three
identifiable trends
1. Changing social expectations: The Consumers of today are more learned and aware
about the social responsibility of the company whose products they buy. Thus it has
become imperative for the companies to maintain public trust and confidence.
2. Increasing affluence: The standard of living gives the consumer the leverage to
afford, pick and choose the products they buy. The society can now restrict or bring
forward the bottom line of any organisation on the basis of its social image.
3. Globalization and free flow of Information: Growing influence of media exposes
the mistakes’ by companies immediately to the attention of the public. In addition,
the Internet fuels communication among like-minded groups and consumers empowering them to spread their message, while giving them the means to coordinate collective action.
[5] PSUs – key contributors to socio-economic development of India: The government of
India formed public sector undertakings (PSUs) to attain inclusive growth, considering the
social as well as economic development of the country. The government established them
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
with the purpose of building industrial capacity, creating employment opportunities and
improving the socio-economic condition.
Both, central public sector enterprises (CPSEs) and state level PSUs have played a vital role
in supporting the socio-economic development of the country. They are actively involved in
various areas of CSR such as education, healthcare, improving infrastructure, social
empowerment, vocational training and environmental protection among others. With a high
degree of support from the government, CSPEs acts as a catalyst of social enterprise by
providing such diverse services for grass root development. Following are the Revised CSR
and sustainability guidelines for CPSEs intended to attain the nation’s aim of inclusive
growth
India has emerged as one of the world’s strongest emerging markets and PSUs have played a
vital role in achieving this growth and development. In order to sustain this growth, CSR
initiatives have become important as they form a crucial part of the companies’ strategic
decision-making process. In order to integrate this into their business models and achieve the
nation’s aim of inclusive growth, the revised CSR and sustainability guidelines issued by the
DPE in Dec 2012 (effective April 2013) are expected to play a crucial role. The revised
guideline has urged the CPSEs to embrace a robust CSR practice that is in the interest of all
stakeholders.
As per the new guidelines, it is mandatory for CPSEs to disclose its various CSR initiatives
and performance to stakeholders. Earlier, CSR and sustainable development were treated as
two separate subject areas and were dealt with differently for the purpose of memorandum
of understanding (MoU) evaluation. However, now they are combined into a single set of
guidelines for greater transparency. The budgetary allocation for CSR also stands modified.
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
The revised CSR and Sustainability budgetary allocation for CPSEs
Net Profit in the previous year
Less Than Rs.100 Crores
Budgetary allocation as a % of Net Profit in previous
year
3–5%
Rs. 10 Crores to 500 Crores
2–3%
Rs. 500 Crores and above
1–2%
Source: Department of Public Enterprises, Guidelines on CSR and Sustainability
The CPSEs would have to utilize and spend the entire amount earmarked for CSR, or would
have to disclose the reasons for not utilizing the full amount. Further, if the CPSEs are
unable to spend the earmarked amount for CSR in a particular year, it would have to spend
the amount in the next two financial years, failing which, it would be transferred to
‘Sustainability Fund’. Currently, its implementation mechanism is being formulated
separately.
However, the government has not mandated loss-making or negative net worth CPSEs to
earmark specific funds for CSR activities. However, they are expected to pursue the same by
integrating them into their business process. They can work in collaboration with other profit
making CPSEs, in areas that do not require financial support.
The new guideline has also focused on implementing a robust mechanism for project
monitoring. In order to avoid conflict of interest, the guideline enables companies to have a
third-party monitoring mechanism. For instance, if a company is implementing CSR projects
with the help of its own employees, then for monitoring its implementation it would have to
go through a third party and vice-versa. The chart below highlights the key changes in CSR
and sustainability guidelines for CPSEs:7|Page
Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
[6] Points of Concern for CSR implementations in India:
 2% spending on CSR is not mandatory for Companies; the rules are in line with the
‘Comply or explain’ principle with penalties applicable only if an explanation is not
offered. This could really be an escape clause for companies not meeting the
necessary CSR requirements.
 Tax treatment to CSR spending by companies whether it is to be treated as nondeductible income since it is an allocation of profit, or, whether it is to be treated as
an allowable expenditure under the Income Tax Act.
 Even central public sector enterprises, subject to CSR norms under separate
guidelines, will, on enactment of the bill, come within the purview of these new
provisions.
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
CSR measurement is an important aspect of sustainability program which provides a way to
gauge, track and report the progress of a company towards achieving sustainable
development goals. A common axiom of sustainability management is “What gets measured
,gets managed” The proposed model depicted below is an attempt to provide the authorities
to systematize the implementation of CSR policy in India.
FRAMEWORK -1
The money/resources spend in the activity w.r.t. the parameter will be called as the monetary
value. This monetary value will be associated with every CSR activity carried by the
organisation. The monetary value will be converted into points. This conversion is based on
the factors such as Annual turnover of the company, annual profit of the company and
percentage of surplus profit which is allotted to CSR activities.
PARAMETERS FOR CSR MEASUREMENT
1.General information of the company :
-
Nature of the company
-
Surplus profit of the company (in that particular financial year)
-
Whether PSU or a Private company
2.Organisational perspective :
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-
Tenure of the company
-
Number of years , the company has been contributing in CSR activities.
-
CSR awards
-
Does the company have a separate CSR cell
-
How many employees in the CSR cell
-
Does the CSR cell have Mission, Vision & objectives in place
-
Are base line surveys conducted before actually implementing CSR activity.
-
Awareness programs for the stakeholders
Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
1. Environmental Perspective :
The parameters under the Environmental perspective consists of policies of the
company for natural environment.
-
Does the org have a Environment cell
-
Does the org have a environment policy
-
Regulations & ISO 14000 etc compliance.
-
Pollution Standards: What is the monetary allocation towards Pollution
prevention.
-
Natural resource management
-
Dealing with harmful wastes of the company
-
Recycling of material
-
Steps towards minimization of waste, packaging, emissions &pollutions.
2. Community Perspective :
-
Disaster Management: Monetary value with respect to the companys
participation in disaster relief work such as Flood, earthquake, war etc.
-
Rural Development programs (with Government or with UN agencies or with
NGOs)
-
Formation of cooperatives.
3. Constructive Partnerships with Government at various levels such as
-
IGOs (Intergovernmental organisations)
-
NGOs (Non Governmental organisations)
-
Local communities
Apart from the above mentioned parameters, points will be allotted for contributing to the
development of the nation as a whole. Maximum points will be allotted to the company
which contributes in dealing with the critical issues.
The structure of the Indian economy is service centric with over 55% of GDP being
contributed by the service sector. Agriculture contribution to GDP is around 14%.
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs

There is progress seen on Human Development Index (HDI) with a 18.65% increase
in index value between 2009-2012.However inequality remains a concern with 28.7%
loss in HDI value on account of inequalities.

Though there are improvements seen in literacy rates of both males & females, there
is a significant gender gap.

Poverty levels remain high in the country with almost 37.2% of the population
deemed income poor and over 53.7% multidimensional poor.
CSR measurement parameters based on the company’s contribution in dealing with the
Critical issues : CCSR
Critical issue 1 : Hunger & Poverty
Till date, India has been moderately successful in reducing poverty. The poverty headcount
ratio which is estimated to reach 18.6% by 2015(according to the Govt. of India MDG
report) is likely to miss the target by 3.5% points.
Measurement shall involve:
- Activities directed at eradicating hunger
- Activities directed to curb malnutrition cases
Critical issue 2 : Primary Education
Measurement shall involve Activities directed at
- Reducing dropout rates of children at the elementary level
- Developing minimum standards of educational attainment in elementary schools
- Increasing the literacy rate
- Reducing the gender gap in literacy
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Critical issue 3: Promote gender equality & Women empowerment
Gender inequality persists and women continue to face discrimination in access to education,
work and economic assets, and participation in government. For example, in every
developing region, women tend to hold less secure jobs than men, with fewer social benefits.
Measurement shall involve Activities directed at
- Women Empowerment
Critical issue 4 : Environmental sustainability
According to the UNDP reports ,India has made some progress towards the Millennium
Development Goal(MDG) of ensuring environmental sustainability. Forest cover has
increased to 21.02 percent and protected areas cover to about 4.83 percent of the country’s
total land area. Reducing the energy intensity of GDP growth through higher energy
efficiency will be the key to achieving energy security.
India is on-track in achieving the MDG target for sustainable access to safe drinking water.
The overall proportion of households having access to improved water sources increased
from 68.2 percent in 1992-93 to 84.4 percent in 2011-12.
However India, which is one of the most densely populated countries in the world, has not
recorded similar progress in improving sanitation facilities over the last decade. The
proportion of households without toilet facilities declined from 70 percent in 1992-93 to
about 47 percent in 2011-12. At current progress, the country is unlikely to achieve the target
of reducing the proportion of households having no access to sanitation to 38 percent by
2015.
Measurement shall involve Activities directed at
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- Increasing forest and tree cover
- Providing clean drinking water
- Road construction in hilly & tribal areas
Sample CSR Computation model :
ACTIVITIES
PARAMETER
Corporate Moral Responsibility
Corporate Social Responsibility
Critical CSR
Weight
Weight
Weight
Monetary
Activity
Monetary
Activity
Monet
allocation
allocation
ary
(%)
(%)
allocati
Activity
on (%)
Environment
Community
Constructive
partnerships with
Government
Calculation of Points :
Points will be calculated on the basis of weight allotted to the activity and percentage of
monetary allocation for the activity.
Percentage of monetary allocation = Amount spent on the activity
x 100
Total amount allocated for CSR(annual)
Criteria for giving weights :
Range
Type
0.1 - 1.0
CMR
1.0 - 5.0
CSR
5.0 – 9.0
CCSR
The queries where Yes/No is the answer. Allot 1 point to YES and 0 point to NO
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FRAMEWORK -2
Aligning 7S for successful CSR implementation and moving towards sustainability
development
STRATEGY
STRUCTURE
SYSTEMS
SHARED VALUES

Comprehensive strategy for implementing CSR&SD

A blend of organisational objectives & CSR objectives

Adjusting strategy to Environmental issues

Structure of CSR & SD commitees.

Eg.MECL & NTPC

Planning

Base line survey

Implementation

Control

Reporting

Impact Analysis

Developing Core values inclined towards socio economic
growth of India as a whole

VMO of CSR&SD

Communication
&
awareness
among
organisation
employees
STYLE
STAFF

Leadership style

Cooperation from Employees

Separate team for CSR&SD

Appropriate number of staff
Eg.CIL will be recruiting new staff for CSR
SKILLS
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
Special skills

Identify skills already available in the organisation

Define the process of skill assessment
Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
FRAMEWORK -3
At present, the CSR activities of any PSU are directed in the areas where their projects are
implemented.But there is no systematised framework for the same. This model proposes that
irrespective of the project areas of the PSUs, a BLOCK should be adopted by the PSU. The size of
the block will be based on the population density of the region. A BLOCK will be allocated to the
PSU on the basis of the funds available with the PSU for the CSR & SD activities. The PSU will
now be concentrating on the socio-economic development of the block allotted to it . If every PSU
takes care of the development of a respective region, this in turn will result in sustainable socio
economic development of the country as a whole.
PSU 1
ADOP
T
CS
CMR
R Block
SocioEconomic
development
of the block
CCSR
PSU 2
ADOP
T
CS
CMR
R Block
CCSR
PSU 3
Conclusion :
ADOP
T
CS
CMR
R Block
SocioEconomic
development
of the block
SocioEconomic
development
of the block
Sustainable
Socio-economic
Development of
the country
CCSR
CSR activities, especially at the grass root levels provide opportunities to connect
with specific strata of people that necessarily might not be a part of the company’s
clientele. Through CSR activities, beneficiaries also get a chance to know more about
the company and its products. Further, customers who are well versed about the
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
company’s CSR activities might perceive the company and its products in a positive
light.
Investors, to maximize the social impact of their investment, are also taking
increasing interest in supporting businesses that follow effective CSR practices.
Consequently, they are seeking more information about their investee firm’s CSR
initiatives and performance. Further, investors are realizing the importance of CSR as
a major tool available to companies to manage exposure to non-financial risks.
Hence, a robust CSR program goes a long way in complementing business strengths
in adding value to investment attractiveness.
The CSR initiatives of Indian PSEs have tremendous potential in addressing structural
challenges of inclusive growth and marginalisation causing deprivation of many people in the
nation. They also have the opportunity and potential to transform the nature of global
business itself. Indian CSR PSEs can herald a new generation business paradigm that is based
on an interconnected vision of all people’s well-being, growth and contentment.
[7] Concluding Remarks: As it is clear that the efforts of PSUs should be in sync
with each other such that the overall outcome is aligned to the inclusive growth
objectives prioritized by Indian policy makers. There has to be a guideline wherein
the PSUs establish special cells, develop competencies and attempt outcome based
programs to suit to the growth targets of country. Although we may not see synergic
gains of CSR efforts in near future in absence of concrete directions and guidelines,
we must make efforts to avoid duplication of work. Need of the hour is that we
should go in for top down approach where PSUs act as SBUs for achieving target of
inclusive and sustainable growth. Idea is very simple, Key results will follow when
one knows KRAs.
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[8] References:
1. Carroll, A.B ., 1991. The pyramid of corporate social responsibility: Toward the
moral management of organizational stakeholders. Business Horizons, 34(4): 39-48.
2. Das, S.C., 2009. Status and direction of corporate social in Indian perspective: An
exploratory study. Social ResponsibilityJounal, 5(1): 34-47.
3. The Challenges of Social Corporate Social Responsibility: Facts for You, May 2013,
pp. 38-39
4. India, Ministry of Corporate Affairs, Corporate Social Responsibility Voluntary
Guidelines 2009
5. Guidelines on Corporate Social Responsibility and Sustainability for Central Public
Sector Enterprises – DPE(2013)
6. Corporate Social Responsibility Practices in India, Times Foundation, the corporate
social responsibility wing of the Bennett, Coleman & CO. Ltd.
7. Overview of Corporate Social Responsibility By: S. Ravi, FCA
8. Ahona Ghosh & Kiran Kabtta Somvanshi, ET Bureau Jan 24, 2013
9. D&B Research findings
Webliography:http://en.wikipedia.org/wiki/Evolution_of_corporate_social_responsibility_in_India
http://www.csrwire.com
www.globalissues.org/issue/367/sustainable-development
www.managementparadise.com
http://unglobalcompact.org
www.wikipedia/wiki/sustainable_development
www.csrhub.tiss.edu/uploads/docs/strategy.pdf
http://www.unmillenniumproject.org/goals/index.htm
http://www.un.org/millenniumgoals/bkgd.shtml
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ANNEXURES
Annexure 1: Four Phases of CSR Development in India
The first phase of CSR was driven by noble deeds of philanthropists and charity. It was
influenced by family values, traditions, culture and religion along with industrialization. Till
1850, the wealthy businessmen shared their riches with the society by either setting up
temples or religious institutions. In times of famines, they opened their granaries for the poor
and hungry. The approach towards CSR changed with the arrival of colonial rule in 1850. In
the Pre-independence era, the pioneers or propagators of industrialization also supported the
concept of CSR. In 1900s, the industrialist families like Tatas, Birlas, Modis, Godrej, Bajajs
and Singhanias promoted this concept by setting up charitable foundations, educational and
healthcare institutions, and trusts for community development. It may also be interesting to
note that their efforts for social benefit were also driven by political motives.
The second phase was the period of independence struggle when the industrialists
were pressurized to show their dedication towards the benefit of the society. Mahatma
Gandhi urged to the powerful industrialists to share their wealth for the benefit of
underprivileged section of the society. He gave the concept of trusteeship. This concept of
trusteeship helped in the socio-economic growth of India. Gandhi regarded the Indian
companies and industries as “Temples of Modern India”. He influenced the industrialists and
business houses to build trusts for colleges, research and training institutes. These trusts also
worked to enhance social reforms like rural development, women empowerment and
education.
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In the third phase from 1960-1980, CSR was influenced by the emergence of Public
sector undertakings to ensure proper distribution of wealth. The policy of industrial
licensing, high taxes and restrictions on the private sector resulted in corporate malpractices.
This led to enactment of legislation regarding corporate governance, labor and environmental
issues. Still the PSUs were not very successful. Therefore there was a natural shift of
expectation from the public to the private sector and their active involvement in the socioeconomic growth. In 1965, the academicians, politicians and businessmen set up a national
workshop on CSR, where great stress was laid on social accountability and transparency.
In the fourth phase from 1980 onwards, Indian companies integrated CSR into a
sustainable business strategy. With globalization and economic liberalization in 1990s, and
partial withdrawal of controls and licensing systems there was a boom in the economic
growth of the country. This led to the increased momentum in industrial growth, making it
possible for the companies to contribute more towards social responsibility. What started as
charity is now understood and accepted as responsibility.
Annexure2: Companies Bill and CSR
Purpose of Inclusion of CSR in the Companies Bill
•
Allow corporates to harness and channelize their core competencies as well as
develop effective business models
•
Promote and facilitate far better connect between businesses and communities
•
Facilitate deeper thought and longer term strategies for addressing some of our most
persistent social, economic and environmental problems
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•
Assist in synergizing partnerships between Corporates, Governments, Civil Society
Organizations, Academic Institutions and Social Entrepreneurs
Companies Bill and CSR – Clause 135
Every Company With :

Net Worth of Rs. 500 Crores or more

Turnover of Rs. 1000 Crores or more

Net Profit of Rs. 5 Crores or more

Shall constitute a Corporate Social Responsibility Committee of the Board
consisting of three or more directors, out of which at least one director shall
be an independent director.
Activities Required for Qualifying Companies
Duty of the Board :

Disclose the composition of the CSR Committee in its report

Approve the Company’s CSR policy after considering the recommendations of
the committee

Disclose the CSR policy in its report and on Company Website

Ensure the implementation of the policy

To spend at least 2% of the Company’s average profit for the last 3 financial
years for this purpose

Give preference to spending in local areas where it operates

Specify reasons in report in case of failure
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Companies Bill – Permissible CSR Activities
Schedule VII of the Companies Bill requires the CSR policy created by the CSR
committee involve at least one of the following focus areas:
 Eradicating extreme hunger and poverty;
 Promotion of education;
 Promoting gender equality and empowering women;
 Reducing child mortality and improving maternal health;
 Combating [HIV], [AIDS], malaria and other diseases;
 Ensuring environmental sustainability;
 Employment-enhancing vocational skills;
 Social business projects;
 Contribution to the Prime Minister’s National Relief Fund or any other fund set up by
the Central Government or the state governments for socioeconomic development,
and relief and funds for the welfare of the Scheduled Castes, the Scheduled Tribes,
other backward classes, minorities and women; and
 Such other matters as may be prescribed.
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
Annexure 3: Duty of the Corporate Social Responsibility Committee

Formulate and recommend a CSR Policy to the Board indicating the activities to
be undertaken by the Company

Recommend the amount of expenditure to be incurred on CSR related activities

Monitor the Company’s CSR policy from time to time.
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Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
Annexure 4: TOP PSU’s Spending on CSR
Total funds
Maharatna
CPSEs S. No.
Name of the CPSE
Year
allocated for
CSR
(Rs. Crore)
1.
2.
3.
4.
5.
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Funds utilized
for CSR
(Rs. Crore )
2010-11
262.28
152.33
2011-12
553.33
77.33
Indian Oil Corporation
2010-11
131.11
128.41
Limited
2011-12
95360
82.73
National Thermal Power
2010-11
72.37
72.21
Corporation Limited
2011-12
45.52
49.43
Oil and Natural Gas
2010-11
335.352
219.03
Corporation Limited
2011-12
378.48
121.08
Steel Authority of India
2010-11
94.00
68.95
Limited
2011-12
64.00
61.25
Coal India Limited
Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
Navratna
CPSEs S. No.
Name of the CPSE
Year
Total funds
Funds utilized
allocated for
for CSR
CSR
(Rs. Crore )
(Rs. Crore)
1.
2.
3.
2010-11
2.74
2.08
2011-12
2.25
2.36
Bharat Heavy Electrical
2010-11
21.55
4.30
Limited
2011-12
30.05
4.87
Bharat Petroleum
2010-11
22.00
18.23
Corporation Limited
2011-12
7.73
7.76
Bharat Electronics Limited
69.54
(including carry
4.
GAIL (India) Limited
2010-11
forward amount
63.91
2011-12
of financial year
54.43
2009-10)
82.77
No specific
allocation of
money for CSR,
5.
Hindustan Aeronautics
2010-11
as CSR Policy
1.79
Limited
2011-12
was notified
5.8
formally during
November 2010
5.00
6.
Hindustan Petroleum
2010-11
15.00
20.10
Corporation Limited
2011-12
30.78
26.54
Since MTNL is in
7.
Mahanagar Telephone
2010-11
Nigam Limited
2011-12
losses, no
specific allotment
is made under
CSR Head
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-
Achieving Strategic fit through sustainable societal development
- A suggestive framework for CSR measurement for PSUs
8.
9.
10.
11.
12.
13.
14.
15.
National Aluminum
2010-11
26.77
26.77
company Limited
2011-12
34.22
34.22
2010-11
81.56
62.23
2011-12
80.13
86.72
Neyveli Lignite
2010-11
12.47
13.23
Corporation Limited
2011-12
13.00
16.14
2010-11
25.00
29.40
2011-12
50.00
50.19
Power Finance
2010-11
11.89
8.91
Corporation Limited
2011-12
13.24
13.27
Power Grid Corporation of
2010-11
20.41
15.58
India Limited
2011-12
13.48
24.93
Rashtriya Ispat Nigam
2010-11
15.40
11.73
Limited
2011-12
12.00
10.62
Rural Electrification
2010-11
5.10
1.38
Corporation Limited
2011-12
12.85
12.99
NDMD Limited
Oil India Limited
5.84 – including the
16.
Shipping Corporation of
2010-11
3.77
India Limited
2011-12
5.67
balance carry
forwarded from the
previous year
5.84
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