The government on Monday clarified that expenditure done by companies towards addressing the Covid-19 pandemic will count towards mandated Corporate Social Responsibility (CSR) expenditure. Companies with a minimum net worth of Rs 500 crore, turnover of Rs 1,000 crore, or net profit of Rs 5 crore are required every year to spend at least 2 per cent of their average profit for the previous three years on CSR activities. “Keeping in view the spread of the novel corona virus in India, . and decision of the 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,” said a notification by the Corporate Affairs Ministry. The Ministry has previously declared that expenditure undertaken for relief effort in the aftermath of both major floods in Kerala and Cyclone Fani in Odisha would be counted towards CSR expenditure. The notification clarified that funds could be spent on various activities related to Covid-19 under permitted CSR expenditures including “promotion of healthcare, including preventive healthcare and sanitisation and disaster relief”. Pavan Kumar Viijay, founder of Corporate Professionals group, welcomed the clarification and recommended that the government create a portal to outline requirements that companies may be able to contribute towards. “It is suggested the government may immediately create a portal on which specific requirements by way of equipment, medicines may be posted and corporates may be permitted to contribute in cash or kind towards those requirements,” he said.
