New Delhi, 8 October 2020: Bharat Electronics Limited (BEL), a Navratna PSU has not been able to spend its prescribed (Corporate Social Responsibility CSR) budget even once ever since the CSR spend was made mandatory through the Companies Act 2013. Over the years, the company’s unspent carry-forward CSR budget from previous years has become almost equal to its annual prescribed CSR budget.
The company’s prescribed CSR budget for 2019-20 was Rs 43.10 Crore while its carry-forward CSR amount accumulated over these year was Rs 42.17 Crore in the same year. However, for its inefficient CSR efforts, the company has been trying to take refuge under its long term projects and plans.
Though the company used this ‘long term project which spread across more than one fiscal year’ to hide its failure, it keeps on listing several programmes every year in its CSR activities where it doesn’t spend a single penny in that particular year.
No lessons learnt
Since 2014-15, the company has not been able to spend its prescribed CSR budget in any particular year. Take an example of the year ending on March 31, 2020. The company’s average net profit for the last three financial years stood at Rs 2,155.18 Crore. Thus, its prescribed CSR budget (2% of the total amount) was calculated as 31.17 Crore and out of this, the company failed to spend Rs11.93 Crore.
This is when the company donated Rs10 Crore to the PM CARES fund, otherwise, it’s expenditure on CSR activities would have been much lower.
Despite having donated almost one-third of its CSR budget to the PM Cares Fund, BEL just managed to spend around 73% of the prescribed CSR budget. Without the PM CARES fund, it could have barely managed to spend 50% of its prescribed CSR budget in 2019-20.
This shows the company’s seriousness towards the mandatory CSR obligation. In the initial four years, since 2014, BEL was not able to spend even 50% of its mandatory obligation. Though, the unspent amount percentage has reduced in recent years, there is still a significant amount of the company’s annual CSR budget that is left to spend every year.
Unspent carry-forward CSR budget see the same fate
Interestingly, the carry forward CSR budget from previous years also stood at Rs42.17 Crore in 2019-20 and the Navratna Company which is engaged in manufacturing advanced electronic products for armed forces, managed to spend only 45% of this budget too.
Similar is the story of 2018-19, when its carry-forward CSR budget from the previous year, was higher than the yearly prescribed CSR budget. (See the box)
In the particular year, BEL manages to spend merely 30.5% of the CSR money of the previous year.
The company doesn’t give details of carry-forward CSR money of the previous year (before 2018-19) but it is quite clear that it has not been able to spend the prescribed CSR budget completely since 2014.
Details of BEL’s CSR spend over the years
| Financial year | Prescribed CSR budget (in Rs Crore) | Unspent amount (in Rs Crore) | Unspent (in %) | Carry forward CSR budget (from previous years) (in Rs Cr) | Spent (in Rs Cr) |
| 2019-20 | 43.10 | 11.93 | 27.68 | 42.17 | 19.25 |
| 2018-19 | 35.43 | 13.25 | 37.39 | 41.62 | 12.69 |
| 2017-18 | 34.75 | 20.59 | 59.25 | — | 10.20 |
| 2016-17 | 29.72 | 18.22 | 61.30 | — | — |
| 2015-16 | 25.23 | 17.80* | 70.56 | — | — |
| 2014-15 | 22.38 | 18.47* | 82.54 | — | — |
*Though the company shows there is no unspent money of prescribed CSR budget but it also goes on saying that these amounts are part of project wise Provision which has been made in the books for amount yet to be spent against the respective project
As a reason for not spending the prescribed CSR budget in year after year, it keeps on saying, "In order to have a long term social impact through CSR, the Company has taken up several initiatives in project mode with project duration of more than one year and milestone based payments spread across more than one fiscal year."
The answer doesn’t look satisfactory when its annual CSR efforts are evaluated minutely. Close analysis of its CSR report highlights that every year; the company has few projects in hand where money is not allocated at all. It is strange why the company listed all these activities in the particular year when it didn’t spend a single penny on it. These are the few programs where it didn’t list any money.
The programmes where the company didn’t list any money
| Financial year | Name of the project | Amount outlay Project wise (in Rs lakh) | Amount Spent (in Rs lakh) |
| 2019-20 | Inclusive & Sustainable Development of Puching Village, Construction of community halls in 5 villages of Dhule | 99.01 | 0.00 |
| 2019-20 | Rejuvenation of Lake in Bengaluru | 98.89 | 0.00 |
| 2018-19 | Vocational Skill Development Training at BEL-BG in collaboration with Electronic Sector Skill Council of India (ESSCI) | 39.00 | 0.00 |
| 2018-19 | Segregation of Household Waste for Waste Management & Fabrication of Agroshade Net Greenhouse Nuery at INS Valsura | 19.38 | 0.00 |
| 2018-19 | Contribution to IITM Incubation Cell, Chennai Status: Ongoing | 40.00 | 0.00 |
| 2018-19 | Inclusive & Sustainable Development of Puching Village | 291.80 | 0.00 |
| 2017-18 | Providing OPD Medical Facility to Senior Citizens; Providing Ambulance | 30.00 | 0.00 |
| 2017-18 | Rejuvenation & de-silting of existing water bodies, providing check dams & solar pumping systems. | 126.00 | 0.00 |
| 2017-18 | Inclusive and Sustainable Development of Puching (Khebuching) Village (Phase-I) under "Swachh Bharat Abhiyan" | 95.67 | 0.00 |
| 2017-18 | Provision of Solar lights, Toilets, laboratory & dining hall in School, Borewell, Community Centres, Roads etc. for tribal colonies / Haadis in GM Halli & Huskur Haadi under "Swachh Bharat Abhiyan" | 137.00 | 0.00 |
| 2016-17 | Development of adopted village ‘Maralagundla’ under Hon’ble PM’s "Swachh Bharat Abhiyan" in Ramnagara district of Karnataka | 219.42 | 0.00 |
The company says that it has taken various CSR programmes/initiatives/projects which are in-line with Section 135 & Schedule VII of the Companies Act, 2013. It might be in line with the law but it is definitely missing the spirit.
