Coal news and updates

Coal committee asks Govt to ensure mandatory CSR spending

Disapproving the “casual” approach by the government in ensuring CSR activities by firms, a parliamentary panel has asked it to initiate immediate steps for mandatory such spending by private companies, which have been allocated captive coal blocks.

“Immediately take up the necessary steps to ensure that CSR (corporate social responsibility) activities are undertaken by all the private companies to whom coal blocks have been awarded and where production/excavation of coal/lignite have started,” Standing Committee on Coal and Steel, chaired by Kalyan Banerjee has asked the government.

The funds earmarked and utilised for CSR activities by these private coal blocks developers should also be reflected in the annual report of the mining and coal from next year, it has said in its latest report.

As on date, of the about 200 blocks allotted so far, 38 captive coal blocks have come under production and the production achieved is 21.740 million tonnes (MT) — 13.6 MT for private companies and 8 MT for government companies.

The Committee has also expressed unhappiness on Steel Ministry’s reply to it that so far there is no provision of CSR activities by private companies.

“The Committee are unhappy to note that though the Parliament has passed a new legislation Company Act, 2013 and the same was notified on August 30, 2013, the Ministry of Steel in their action taken reply on September 20, 2013 has referred to companies Act, 1956 and stated that there is no provision for CSR activities by private companies.

Under the new Companies Act, 2013, which has replaced nearly six-decade old legislation governing the way corporates function and are regulated in India, all profitable companies with a sizeable business would have to spend every year at least 2 per cent of three-year average profit on CSR works.

This would apply to the companies with turnover of Rs. 1,000 crore and more, or networth of Rs. 500 crore and more, or a net profit of Rs. 5 crore and more.

The new rules also require the companies to set up a CSR committee of their board members, including at least one independent director.

“While deprecating the casual approach of the Ministry in not furnishing the updated information to them, the Committee would like that the Ministry should immediately take up the necessary steps to ensure that CSR activities are undertaken by all the private companies to whom coal blocks have been allotted,” it said.

Source: PTI