New Delhi: West Bengal chief minister Mamata Banerjee’s request to Prime Minister Narendra Modi to consider company contribution to the chief minister’s relief fund (CMRF) as part of the corporate social responsibility (CSR) spends of businesses goes against the spirit of the CSR law, according to experts.
In her communiqué, Banerjee requested that donations to CMRF be also made an eligible activity under CSR rule on the lines of the Prime Minister’s National Relief Fund (PMNRF). The Trinamool Congress chief underlined that the CMRF is always under financial constraints because of limited donations from companies and that if the proposal is accepted by the Centre, the “contributions" will also enable the donors to claim tax breaks.
It is not the first time that a state government has sought CSR contributions towards government programmes. Last week, Punjab chief minister Captain Amarinder Singh urged companies to contribute a part of their CSR budget for the state government’s social security fund. Earlier, the Maharashtra government had sought to raise Rs335 crore through CSR for its flagship programme, the village social transformation mission.
Bhaskar Chatterjee, who drafted the CSR guidelines, says the move would be against the purpose for which CSR rule was formulated. “The purpose of the CSR exercise is that companies spend themselves, and not inflate government kitty," he said.
Echoing similar views, Namrata Rana of Futurescape Netcom, a business and technology advisory firm, said the CSR law was aimed at giving a boost to private participation in public projects. The issue is being debated because there are grey areas around this and these, thus, need to be addressed at the policy level, she said.
The contribution towards the PMRF has seen a steady fall for the past three financial years, with firms donating Rs109 crore in 2016-17, as against Rs211 crore in 2014-15, according to the data available on government’s national CSR portal csr.gov.in.
Chaterjee, the former director general of the think-tank Indian Institute of Corporate Affairs, points out that the idea to include contribution to the PMRF under CSR was to provide an “escape vault" for businesses who may have failed to spend their mandated 2% of CSR budget.