New Delhi, April 11 (IANS) As the fight against novel coronavirus gets longer with the addition of increasing number of positive cases across the country, there is now a demand from states to channelise some corporate CSR funds into Chief Ministers Relief Fund or State Relief Fund for Covid-19.
Sources said that ministry of corporate affairs has received several references/ representations from various stakeholders including state governments to include corporate contributions to CM Relief Fund should also qualify as expenditure on corporate social responsibility (CSR).
However, no decision has yet been taken on their request. MCA will need to amend rules of CSR through a notification of new activities are included as eligible CSR spend.
On March 29, Ministry of Corporate Affairs had included donations made by companies to the Prime Minister's Citizens Assistance and Relief in Emergency Situations Fund (PM CARES Fund) as expenditure on CSR.
“Chief Minister's Relief Fund' or ‘State Relief Fund for COVID-19′ is not included in Schedule VII of the Companies Act, 2013 and therefore any contribution to such funds shall not qualify as admissible CSR expenditure,” MCA has clarified in FAQ on eligible activities for CSR spending.
States are looking at getting corporate funds into CM Relief Fund to undertake larger area specific programmes that they are undertaking to combat Covid-19. Moreover, with state finances stressed, this would provide additional avenue to mobilise funds for relief activities.
MCA has clarified that though contribution to CM Relief Fund May not be eligible CSR activity, such contribution can come into State Disaster Management Authority for fighting the coronavirus.
Also, corporate could run individual programmes for Covid-19 in various states and use CSR funds into the activities. Corporate spending in this category can go into activities including promotion of healthcare, preventive healthcare, sanitation, disaster management.
The corporate social responsibility rules make it mandatory for large Indian firms to set aside at least 2 per cent of their average net profit for socially responsible expenditures. The norms are applicable to firms with at least Rs 5 crore net profit or Rs 1,000 crore turnover or Rs 500 crore net worth. The list of activities included under CSR is decided by the government.
Companies have off late announced donations to the PM CARES Fund along with several other initiatives to combat with the coronavirus pandemic.
The total corporate social responsibility (CSR) spending by the top 500 companies in the country since the applicability of mandatory CSR in 2014 is likely to cross Rs 60,000 crore by the end of the month as per industry reports.