38 PSUs used their Corporate Social Responsibility funds to together contribute over Rs 2,105 crore to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) fund since its launching on March 28. The Indian Express accessed the records under the Right To Information (RTI) Act, 2005.
Prime Minister Narendra Modi allegedly set up the PM CARES fund to combat the COVID-19 pandemic. According to its official website, it had a corpus of Rs 3,076.62 crore on March 31, 2020, of which Rs 3,075.85 crore was listed as “voluntary contributions”.
Investigation by the Indian Express
The Indian Express while conducting its investigation, sent RTI queries to 55 Public Sector Undertakings (PSUs). Till August 13, it received replies from 38, which stated that they contributed a total of Rs 2,105.38 crore over the past five months from budget allocations in 2019-2020 and 2020-2021.
Thereafter, it sent a query to the Prime Minister’s Office (PMO) on the contributions received. On May 28, it received a reply from PMO. However, similar to the responses of other RTIs against PM-CARES Funds, the office did not furnish details stating, “PM Cares Fund is not a public authority under the ambit of Section 2(h) of the RTI Act. However, relevant information in respect of PM CARES Fund may be seen on the website pmcares.gov.in.”
Further, the website does not identify the contributors or provide details of contributions. Subsequently, The Indian Express put an appeal; but the PMO’s appellate authority replied on June 24 stating: “No information can be provided to you in this matter.”
As per the replies from the PSUs, they donated from their unused allocation for Corporate Social Responsibility (CSR) activities for 2019-2020 to the PM CARES fund. Significantly, they donated to the fund that was launched with just four days left for the financial year to end. In other cases, they contributed from this year’s CSR budget even though the total allocation is not finalised yet. Unexpectedly, a PSU accepted that it had contributed more than the estimate allocated for such activities.
A major consideration for the setting up of PSUs was to accelerate the growth of core sectors of the economy; to serve the equipment needs strategically. Certain public sector undertakings are additional financial autonomy. These companies are “public sector companies that have comparative advantages“, giving them greater autonomy to compete in the global market so as to “support [them] in their drive to become global giants“. Financial autonomy was initially awarded to nine PSUs as Navratna status in 1997. Originally, the term Navaratna meant a talisman composed of nine precious gems. Later, the courts of Gupta emperor, Vikramaditya, and Mughal emperor, Akbar, adopted the term as the collective name for nine extraordinary courtiers at their respective courts.
In 2010, the government established the higher Maharatna category, which raises a company’s investment ceiling from Rs. 1,000 crores to Rs. 5,000 crores.
PSUs in India are also categorised based on their special non-financial objectives and are registered under Section 8 of Companies Act, 2013.
Click here to access the list of PSUs.
Ratna Status From Government
Guidelines for awarding Ratna status are as follows:
|Maharatna||Navratna||Miniratna Category-I||Miniratna Category-II|
|Eligibility||Three years with an average annual net profit of over Rs. 2500 crore, OR Average annual Net worth of Rs. 10,000 crore for 3 years, OR Average annual Turnover of Rs. 20,000 crore for 3 years (against Rs 25,000 crore prescribed earlier)||A score of 60 (out of 100), based on six parameters which include net profit, net worth, total manpower cost, total cost of production, cost of services, PBDIT (Profit Before Depreciation, Interest and Taxes), capital employed, etc., AND A company must first be a Miniratna and have 4 independent directors on its board before it can be made a Navratna.||Have made profits continuously for the last three years or earned a net profit of Rs. 30 crore or more in one of the three years||Have made profits continuously for the last three years and should have a positive net worth.|
|Benefits for investment||Rs. 1,000 crore – Rs. 5,000 crore, or free to decide on investments up to 15% of their net worth in a project||up to Rs. 1,000 crore or 15% of their net worth on a single project or 30% of their net worth in the whole year (not exceeding Rs. 1,000 crores).||up to Rs. 500 crore or equal to their net worth, whichever is lower.||up to Rs. 300 crore or up to 50% of their net worth, whichever is lower.|
Donations by PSUs in the PM-CARES Funds
Among the 38, Oil and Natural Gas Corporation (ONGC) is the top donor with a donation of Rs 300 crore. ONGC used allocation from this year’s CSR budget and stated that they have not determined the budget allocation for 2020-21 yet. Likewise, HPCL also contributed Rs 120 crore from the CSR allocation for 2020-21, which is not yet finalised.
Whereas the Power Finance Corporation, contributed more than its total CSR allocation for 2020-21. In its reply to the RTI, it said that the CSR fund “allocated (on estimation basis)” for the year was Rs.150.28 crore but its contribution for 2020-21 was Rs 200 crore.
Many others also contributed from allocations for 2019-2020 and 2020-2021. OIL India Limited stated that it contributed Rs.13 crore and Rs.25 crore, respectively, and Power Grid Corporation Rs.130 crore and Rs.70 crore. Rural Electrification Corporation contributed Rs.100 crore from its 2019-20 allocation of Rs.156.68 crore and Rs.50 crore from its 2020-21 “estimated” allocation of Rs.152 crore.The Airports Authority of India (AAI) contributed Rs.15 crore out of its allocation of Rs.83.79 crore for 2019-20.
Additionally, BSNL in its reply, said it “has not earned net profit for the financial year 2015-16 to 2018-19. Accordingly, BSNL has not undertaken any CSR initiative from 2015-16 till date”. While, SAIL responded that it has allocated an amount of Rs 33 crore “towards ongoing CSR activities” as “net profit of last three years has been nil.”