Karnataka deputy CM sounds alarm on CSR fund misuse

Shivakumar revealed companies are donating CSR funds to nonprofits outside Karnataka and receiving back half the amount in cash, which harms development efforts, urging deputy commissioners and Zilla Panchayat chiefs to safeguard CSR funds for education locally

Karnataka Deputy Chief Minister D K Shivakumar has raised serious concerns about an ongoing scam involving Corporate Social Responsibility (CSR) funds in the state. Speaking at a review meeting with district officials, Shivakumar accused some corporations of diverting CSR donations to private nonprofits outside Karnataka and then reclaiming nearly half of the money in cash — an illegal practice undermining the purpose of these funds.

According to Shivakumar, companies are issuing cheques to nonprofits in other states as CSR contributions but receive back about 50% of the amount in cash. “This misuse is depriving Karnataka’s development projects, especially those aimed at improving public schools,” he said. He emphasized the role of deputy commissioners and Zilla Panchayat chiefs in ensuring CSR money is properly utilized within the state, particularly for education infrastructure.

The Deputy CM clarified that the Karnataka government does not require corporates to directly hand over CSR funds to the state but insists on transparency and adherence to legal norms. To strengthen CSR fund mobilization for school construction, the government has appointed IAS officers Gunjan Krishna as Coordinating Officer and Khushboo Goel Chowdhary as CEO for the initiative.

Nationwide surge in CSR scams

CSR scams have become a growing concern nationally. These fraudulent schemes typically involve misuse of CSR funds by promising discounted goods or services to beneficiaries while siphoning off money through illegitimate channels.

A similar scam surfaced recently in Kerala, where individuals were deceived with promises of discounted laptops, two-wheelers, and sewing machines, falsely linked to CSR programs. The Enforcement Directorate conducted raids across multiple locations, including the residence of K.N. Ananda Kumar, chairman of a national NGO confederation, uncovering evidence of large-scale financial irregularities.

Karnataka officials are now intensifying efforts to monitor CSR activities to protect public funds and ensure genuine social development.