The government of India has recently decided to allow Indian companies to use their mandatory corporate social responsibility (CSR) spending on measures to fight COVID-19. The Finance Minister Nirmala Sitharaman has confirmed that spending of CSR funds for COVID-19 is eligible CSR activity.
“In view of the spread of novel coronavirus in India, its declaration as pandemic by the WHO, and decision of Government of India to treat this as notified disaster, it is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity,” Sitharaman said on Twitter.
“Keeping in view of the spread of novel Corona Virus (COVID-19) in India, its declaration as pandemic by the World Health Organisaton (WHO), and decision of Government of India to treat this as a notified disaster. It is hereby clarified that spending of CSR funds for COVID-19 is eligible CSR activity,” Ministry of Corporate Affairs notified. “Funds may be spent for various activities related to COVID-19 relating to promotion of healthcare, including preventive health care and sanitation and disaster management.”
According to the Companies Act, firms with a net worth of Rs 500 crore, or turnover of Rs 1,000 crore or net profit of Rs 5 crore or more, are required to set aside 2 per cent of their average net profits over the last three years on corporate social responsibility activities.
