Assam and Meghalaya are the only two states of the North East with companies listed in the National Stock Exchange (NSE) and Bombay Stock Exchange (BSE). In fact, Meghalaya has one Mid Cap and one Small Cap listed companies. Star Cement has market capitalisation of Rs 7891 crore and is in the Mid Cap group while Shyam Century Ferrous Limited with a market capitalisation of Rs 337 crore is in the small cap category. Both companies are in the Jaintia Hills. So what is the contribution of these two companies to Corporate Social Responsibility (CSR) in their areas of operation? While companies do not have to directly pay CSR to the state government, the Companies Act 2013 mandates that they spend a percentage of their profits on CSR activities, giving preference to local areas where they operate. If the company fails to spend the amount, it must explain the reasons in its report and transfer the unspent amount to a government specified fund. The preference for local areas is advisory in nature and not strictly mandatory, requiring a balance between local needs and national priorities.
The states have not protested this unequal deal. Considering that companies rely on extractive mining and create devastating environmental pollution as is evident in the pollution of the Lukha river and deforestation, they should be contributing to eco-restoration programmes. Activities which are normally included by companies in their CSR are (i) Eradicating hunger, poverty and malnutrition, (2) promoting health care including preventive health care (3)Sanitation (4) contribution to the Swachh Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking water. CSR funds are supposed to be used to promote education, including special education and employment enhancing vocational skills especially among children, women, elderly and the differently-abled and livelihood enhancement projects. They are meant to promote gender equality and women’s empowerment; to set up homes and hostels for women and orphans; to set up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups. Above all the CSR funds are meant to ensure environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water.
CSR paid to the central government is intended to be used for a plethora of welfare measures such as research in Science and Technology, Medicine and Engineering and above all to promote the Sustainable Development Goals (SDGs). In India CSR is a mandatory obligation for companies under Section 135 of the Companies Act, 2013. Companies with a net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more in the preceding financial year must constitute a CSR committee and spend at least 2% of their average net profits from the preceding three financial years on specified CSR activities. But is this really happening? And what about the other cement companies operating in Meghalaya but which are not listed in the stock exchange. Its time to hold such companies accountable.
