New Delhi: State-owned units must ensure optimal utilisation of funds allocated for undertaking social activities, apex PSUs' body Standing Conference of Public Enterprises (SCOPE) said Monday.
"The allocated money for CSR activities must be fully utilised and CPSEs should ensure that it reaches the bottom of the society," SCOPE Executive Director U D Choubey said at a function here.
Maharatna PSUs like Coal India, Indian Oil Corporation, ONGC and SAIL have not fully utilised their funds allocated for carrying out corporate social responsibility (CSR) projects in 2011-12.
Among Navratna PSUs, 4 of them including Hindustan Petroleum and RINL have not fully utilised the allocated amount for undertaking such projects, during the same period.
Reacting to this, Choubey said, "It is not outrightly acceptable to us. There is also a need for social audit to ensure that the CSR targets are being met."
At present, if the PAT (profit after tax) of a CPSE in the previous year is less than Rs 100 crore, the range of budgetary allocation for CSR would be 3-5 percent of the net profit and if the PAT is between Rs 100 crore and Rs 500 crore, it would be 2-3 percent of it.
For the public sector unit whose PAT in the previous year is Rs 500 crore and above, the range of budgetary allocation for CSR would be 1-2 percent of net profit.
However, the loss-making companies are not mandated to earmark specific funding for CSR activities.
According to the guidelines on CSR for CPSEs, the CSR budget has to be mandatorily allocated through a board resolution as percentage of net profit in the previous year.
On the issue of surplus funds, SCOPE Chairman Arup Roy Choudhury, who will complete his four-year term tomorrow, said: "It has been discussed with the Finance Ministry and the PSUs have actually given their justification for the requirement of this money.
The government is convinced that this money is required for development of the company."
During 2011-12, reserves and surplus of all CPSEs grew by 9.6 percent year-on-year to Rs 6.13 lakh crore.
Currently, these funds are mostly deposited in banks and earn interest at the rate card.