Corporate Social Responsibility (CSR) in COVID-19

INTRODUCTION

Corporate Social Responsibility (CSR) is responsibility conferred on the Corporates towards the society, the environment and the community within which it operates. CSR is not merely a charity in the present era but helps a lot a Corporate to increase the goodwill and be visible.

Spending funds for CSR activities has been mandated by law for the companies falling under the threshold limits. The mandatory expenditure has to be in such areas which are prescribed under the Schedule VII of the Companies Act, 2013.

Now, looking at the outbreak of the rapidly spreading Novel Corona Virus (COVID-19), the Ministry of Corporate Affairs, Government of India vide it’s General Circular No. 10/2020 No. 05/01/2019-CSR dated 23rd March 2020 has provided certain clarification on the spending of CSR funds for COVID-19. This circular says that under the present circumstances when the World Health Organization (WHO), has declared Corona Virus (COVID-19) as a pandemic, the Government of India has taken a decision to treat this pandemic as a notified disaster. By declaring so any expenditure made on account of COVID- 19 will be treated as an eligible expense under CSR activities.

Here are the Eligible Expenditure Heads where this CSR funds can be utilized under Section 135 and Schedule VII of the Companies Act, 2013:

Activities which may be included by companies in their Corporate Social Responsibility Policies Activities relating to: —

• Eradicating hunger, poverty and malnutrition, promoting health care including preventive health care’ and sanitation including contribution to the Swach Bharat Kosh set-up by the Central Government for the promotion of sanitation and making available safe drinking
• promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly and the differently-abled and livelihood enhancement projects.
• promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, daycare centers and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward
• ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water 4[including contribution to the Clean Ganga Fund set-up by the Central Government for rejuvenation of river Ganga].
• protection of national heritage, art, and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional art and handicrafts;
• measures for the benefit of armed forces veterans, war widows, and their dependents;
• training to promote rural sports, nationally recognized sports, Paralympic sports and Olympic sports
• contribution to the prime minister’s national relief fund or any other fund set up by the central govt. for socio-economic development and relief and welfare of the scheduled caste, tribes, other backward classes, minorities, and women;
• Contribution to incubators funded by Central Government or State Government or any agency or Public Sector Undertaking of Central Government or State Government, and contributions to public- funded Universities, Indian Institute of Technology (IITs), National Laboratories and Autonomous Bodies (established under the auspices of Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Council of Scientific and Industrial Research (CSIR), Department of Atomic Energy (DAE), Defence Research and Development Organisation (DRDO), Department of Science and Technology (DST), Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).
• rural development
• slum area

Explanation: – For the purposes of this item, the term `slum area’ shall mean any area declared as such by the Central Government or any State Government or any other competent authority under any law for the time being in force.

• disaster management, including relief, rehabilitation and reconstruction ”

The Ministry has been receiving several references/ representations from various stakeholders seeking clarifications on eligibility of CSR expenditure related to COVID-19 activities. In this regard, a set of FAQs along with clarifications are provided by the Ministry as below for better understanding of the stakeholders: