CB BureauAside from being the world’s largest democracy and (currently) the country with the second highest number of poor people, India can now also claim to have the tallest statue in the world – the Statue of Unity, or the Sardar Patel statue as it is commonly known. Located in Gujarat, the 182 metre tall statue cost a cool $430 million. While the state government is reported to have paid more than half of that amount, reports have circulated of the country’s biggest public sector units (PSUs) contributing a fair chunk of the remainder.
And this is where controversy has erupted (aside from the questionable logic of spending taxpayers’ money on an expedient tourist attraction). An article in Loksatta by Girish Kuber went viral when it claimed that PSUs had spent hundreds of crores on funding the Sardar Patel statue. The figures quoted can be found here as well. Needless to say, these figures were furiously circulated on social media and over Whatsapp and promptly enough, outrage ensued. With the rising costs of fuel, public anger at the sheer wastefulness of public money (including those by the country’s biggest energy companies) was expected, and some would say justified. For a statue of ‘unity’, it managed to disunite a fair number of people.
CSR for whom?
That PSUs are directed by the whims of those at the highest echelons of the Indian state is a known fact. Less known, though fairly obvious if you think about it, is that the CSR investments of PSUs are often directed towards the government’s pet projects. Take Swachh Bharat Abhiyan for instance – every single PSU that has contributed funds for the Statue of Unity has spent much, much more on the former programme ever since it was launched. The amounts are frankly staggering. The interesting”and concerning”thing to note here is that there is not much in the way of impact assessment or even accountability for such projects. Because of how such hierarchies operate, can one even imagine the CSR head of a PSU demanding answers from the PMO on how its precious money was utilised and what the results are?
The flush of CSR money flowing into the Sardar Patel statue’s coffers from PSU profits is part of a worrisome trend wherein the government increasingly feels entitled to use such funds as it deems fit and, worse, isn’t obliged to provide accountability or disclosure on responsible usage, data and results, while it continues to arm-twist the PSUs into funding their favourite programmes. As this CB report reveals, corporate money in the guise of CSR is the new go-to source of funds for the central and state governments. Promises are made to the electorate and instead of judiciously using the money from their own gigantic budgets, companies (mostly PSUs) are expected to pitch in, bridge the funding gap (if any), and often serve as the primary source of cash injection, thereby contributing to this myth that CSR money should be subservient to government priorities. A 2018 CAG (comptroller & auditor general) report – the General Purpose Financial Reports 2018 of Central Public Sector Enterprises – makes for a riveting account on how CSR funds are being used and misused and are often untracked by PSUs.
Statue of Unity – CSR or vanity project?
Aside from Swachh Bharat Abhiyan, the Statue of Unity is the other programme that most PSUs have in common, uniting all of them when it comes to CSR funding. One can usually find it under the rather bland heading of Sardar Vallabhbai Patel Rashtriya Ekta Trust, which is the name of the special purpose vehicle that was formed for the project in 2013. Whether this project can be categorised as a legitimate CSR activity (protecting national heritage, art and culture) is an open question. Critics have also pointed out, and rightly so, that in a country where there is no dearth of people who need help, all those funds would have been better served on more worthwhile causes and environment sustainability.
The CAG report, mentioned earlier, stated that the Trust approached five PSU firms – ONGC, IOCL, BPCL, HPCL and OIL – in 2016″17 for funds contribution towards the project as there was a shortfall of about Rs 780 crore. A total contribution of Rs 146.83 crore was then made by these five PSU firms under Item (v) of Schedule VII, listed as ‘protection of national heritage, art and culture including restoration of building and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts.’
The report was scathing in its assessment of this expenditure by the PSUs and bluntly stated that ‘this project did not qualify as CSR activity as per Schedule VII of the Companies Act 2013 as it was not a heritage asset.’ The responses of the PSUs to justify their investment in this project were flimsy at best. ONGC stated that the project included activities such as promotion of education, development of the banks of River Narmada up to Bharuch, etc. BPCL, HPCL and IOCL passed the buck to the ministry of corporate affairs (MCA) citing Circular No. 21/2014 issued by the MCA, the basis on which they interpreted this activity as valid CSR work. The circular had clarified, among other things, that Schedule VII was to be liberally interpreted so as to ‘capture the essence of subjects enumerated in the schedule.’
The actual figures on funding
Even if the actual numbers are far lower than those quoted in the Loksatta article, that doesn’t change the fact that significant contributions were made to the project, including an astonishing Rs 10 crore by BPCL just for sanitation facilities at the Statue. The central government allocated Rs 200 crore to the Gujarat government for the project in the 2014″15 budget. But it is the latter that made regular contributions towards the Trust, starting from Rs 100 crore in 2013″14, and reaching the princely sums of Rs 915 crore, Rs 1,066 crore, and Rs 899 crore in the three subsequent years.
As per this report by India Today, Sandeep Kumar, joint managing director at the Sardar Sarovar Narmada Nigam Limited (SSNNL), the organisation responsible for implementing the project, claimed that the total cost of the project was Rs 2,362 crore and an additional Rs 650 crore was to be kept for its maintenance for the next 15 years. The project cost included setting up of a memorial, a 50-room hotel, and infrastructure in the surrounding area. He also said that the central government had given Rs 300 crore while Rs 550 crore was given by the central and state PSUs, private companies and individuals as donations. The remaining expenditure was borne by the Gujarat government.
Standing tall, sowing discontent
The Statue of Unity has been mired in controversy ever since the project was announced in 2010 and eventually when construction began in 2014. The irony of its gargantuan size and cost in a dirt-poor country was lost on few people. Then there were the protests and grievances by the local populace, including tribal communities, who had been suffering from poverty and drought for years and then being displaced thanks to the statue. For instance, out of the 72 villages affected by the project, in 19 of the 32 most affected villages, rehabilitation wasn’t completed and in many cases only compensation was paid but other commitments like land and jobs were not fulfilled. As the history of land displacement shows, without robust mechanisms (such as employment) for long-term rehabilitation of the displaced, monetary compensation ends up being woefully inadequate.
As per the 2011 Census, a majority (around 85 per cent) of the working population in Narmada district, where the statue is located, is engaged in agriculture. Most of them are small farmers who own a few acres of land. Many people live in hunger and constant poverty, primary-school enrolment has been falling, and malnourishment rates continue to increase. As always, petty politics trumps citizens’ concerns.
CB view
Since the Statue of Unity was unveiled on October 31, other similar projects have been announced with the size of the proposed statues growing bigger and costs getting higher. After all, there’s no point building a statue unless it dwarfs the previous record-holder, right? One of the proposed monuments is a 221 metre-high bronze statue of the Hindu god Ram, standing tall on the shore of the Saryu river in Ayodhya. Then there’s the under-construction Shivaji statue called the Shiv Smarak or the Chhatrapati Shivaji Maharaj Memorial, which will be located in the Arabian Sea near the Mumbai coast and was given the green light without a feasibility study. At a height of 212 metres, it will be taller than the Sardar Patel one but if UP CM Yogi has his way, the Ram statue will stand head and shoulders above the other two. Not to be left behind, Andhra Pradesh CM Chandrababu Naidu recently announced a fairly underwhelming (by current standards) 36 metre-tall statue of former Chief Minister N Taraka Rama Rao (NTR). The NTR memorial project will be located on the Nirukonda hill in Amaravati, the capital of Andhra Pradesh, and is estimated to cost around Rs 406 crore.
Who cares about poverty alleviation, reducing carbon emissions, or even winning a few Olympic gold medals when the country can claim to be home to the world’s three tallest statues? We cannot provide adequate healthcare to our citizens but for useful projects such as embarrassingly tall statues, one can always depend on the government and CSR funds to provide the cash.
If the state is to stop treating PSU CSR funds as their private stash, strict regulations will be needed. However, such laws can be passed only by the government and so the laughably vicious cycle continues. For now, things look fairly bleak. Since the state will continue to exploit CSR funds to further its own agenda, CB hopes that this doesn’t spell the demise of the credibility of the CSR Act.
Questions CB sent to PSUs but is yet to get any response:
- Under which clause of Schedule VII does the funding of the Statue of Unity qualify as CSR fund?
- What, according to you, will be the impact of the same project?
- Did the government provide any study or research on the need for the statue project?