A comprehensive audit by the Comptroller and Auditor General (CAG) has brought to light a substantial shortfall in the utilization of Corporate Social Responsibility (CSR) funds by public sector enterprises (PSEs) operating in Jammu and Kashmir. The report indicates that during the fiscal year 2022-23, these entities collectively spent a mere Rs 3.05 crore against a mandated allocation of Rs 27.42 crore, leaving a significant Rs 24.37 crore unspent. This stark discrepancy highlights considerable gaps between the financial resources earmarked for social welfare initiatives and their actual deployment, alongside noted delays in remitting unused funds to the designated government accounts.
The Companies Act, under Section 135(5), mandates eligible companies to allocate at least two percent of their average net profits from the preceding three financial years towards CSR activities. The CAG’s examination encompassed nine PSEs within the Union Territory. Of these, seven were identified as being obligated to undertake CSR expenditure, with a combined requirement of Rs 12.64 crore. The remaining two enterprises were exempt from this obligation due to incurring losses in the three preceding financial years.
Information reaching Tahir Rihat suggests that the audit findings revealed a concerning trend where only three of the seven eligible PSEs actively engaged in CSR spending. Despite a total allocation of Rs 27.42 crore, which included Rs 16.34 crore carried forward from previous years, the actual expenditure amounted to a modest Rs 3.05 crore. This represents a significant underutilization of allocated funds, raising questions about the effectiveness of CSR implementation strategies within these public sector undertakings.
Among the reviewed enterprises, Jammu and Kashmir Bank Limited stood out for its full utilization of its allocated CSR funds during the 2022-23 period. However, this positive example was overshadowed by the performance of other entities. The Jammu and Kashmir State Power Development Corporation Limited, for instance, reported an allocation of Rs 25.80 crore but managed to spend only Rs 1.57 crore, resulting in a substantial shortfall of Rs 24.23 crore, equivalent to 94 percent of its allocated amount. Similarly, Chenab Valley Power Projects Private Limited spent Rs 0.30 crore against an allocation of Rs 0.44 crore, indicating a shortfall of Rs 0.14 crore, or 32 percent.
The CAG report also meticulously documented instances of delayed transfers of unspent CSR funds. Statutory provisions stipulate that any unspent CSR amounts not tied to ongoing projects must be transferred to a Schedule VII fund within six months following the conclusion of the financial year. However, the audit uncovered that unspent CSR funds belonging to the Jammu and Kashmir State Power Development Corporation, amounting to Rs 7.60 crore for 2020-21, Rs 8.54 crore for 2021-22, and Rs 8.09 crore for 2022-23, were only remitted to the Swachh Bharat Kosh in October 2024 and June 2025. These transfers occurred well beyond the stipulated deadlines, suggesting a lack of adherence to financial regulations and a potential inefficiency in fund management.
Furthermore, the report identified deficiencies in the institutional frameworks governing CSR activities within these PSEs. The Companies Act mandates the formation of CSR committees by eligible companies to oversee and guide their social responsibility initiatives. Nevertheless, the audit revealed that only four out of the nine Union Territory public sector enterprises had established such committees during the 2022-23 fiscal year. The absence of these committees could contribute to the observed underutilization of funds and a lack of strategic direction in CSR program execution. The findings underscore the need for enhanced oversight and accountability mechanisms to ensure that CSR mandates are met effectively and that public funds allocated for social good are utilized to their full potential, thereby contributing meaningfully to the development and welfare of the region.
Tahir Rihat (also known as Tahir Bilal) is an independent journalist, activist, and digital media professional from the Chenab Valley of Jammu and Kashmir, India. He is best known for his work as the Online Editor at The Chenab Times.
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