In a bid to include the second and more virulent wave of Covid, the government is now reaching out to the private sector for more help. On these lines, the ministry of corporate affairs (MCA) has additional expanded the provisions associated with CSR activity to incorporate more Covid-associated expenditure by the organizations.
In March last year, the MCA mandated that spending of CSR funds for a variety of Covid-associated measures is an eligible CSR activity. It has additional clarified that spending of these funds for “creating health infrastructure for Covid care, establishment of medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders and other medical equipment for countering Covid” or comparable such activities are eligible CSR activities. Drawing the interest of organizations towards initiatives becoming taken by the DRDO and CISR for setting up short-term Covid care facilities and makeshift hospitals, the MCA stated spending on “setting up Covid care facilities and makeshift hospitals is an eligible CSR activity.
“Further in view of the ongoing work-from-home mode, you may have some vacant buildings at your disposal. You may like to consider converting these vacant office buildings to temporary Covid care facilities with either isolation beds or a combination of isolation and oxygen beds to cater to rapidly increasing Covid caseload in many parts of the country,” it added.
The ministry also emphasised stated the Companies Act, 2013 permits contribution to specified investigation and improvement projects as effectively as contribution to public funded universities and particular organisations engaged in conducting investigation in science, technologies, engineering and medicine as eligible CSR activities.
Any organization with a net worth of at least Rs 500 crore, or a turnover of Rs 1,000 crore or more, and/or a net profit of Rs 5 crore or more in the right away preceding monetary year, is mandated to devote 2% of the typical net profit of the organization in the 3 right away preceding monetary years as CSR.
In FY20, a total of 1,075 organizations, which includes private and public organisation, spent Rs 7,823 crore on CSR activities, although in FY19, a total of 24,392 organizations spent about Rs 18,655 crore on CSR. Of the total annual CSR devote, about 60% of the expenditure has been carried out by way of a variety of implementing agencies.