Updated: August 26, 2020 7:36:58 am
In a move to boost India’s efforts to find effective medicines and vaccines against Covid-19, the government is temporarily allowing investment towards such efforts to be considered as fulfillment of a company’s Corporate Social Responsibility (CSR) obligations.
What are the changes?
This includes pharmaceutical, vaccine and medical device firms, which are expected to undertake research and development of new drugs, vaccines and medical devices as part of their regular business activities.
In fresh amendments to the Companies (Corporate Social Responsibility) Rules, 2014, the Ministry of Corporate Affairs has inserted a provision that would allow firms to claim CSR benefits for such activities until the 2022-2023 financial year.
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What are the amended provisions?
The amendments temporarily remove a provision that would have excluded “activities undertaken in pursuance of its (the company’s) normal course of business” from being considered as CSR activities.
For now, firms engaged in “research and development activity of new vaccine, drugs and medical devices in their normal course of business” will be eligible for CSR benefits for their R&D work related to such activities for Covid-19 products, provided the work is “in collaboration with” any of the institutes or organisations mentioned in item (ix) of Schedule VII of the Companies Act, 2013.
In the normal course, such institutes and organisations, “or any other” central or state fund for socio-economic development and relief, as well as funds for the welfare of Scheduled Castes, Scheduled Tribes, other backward classes, minorities and women.
However, the ministry has also amended this schedule to substitute it with incubators or research and development projects in the field of science, technology, engineering and medicine that are funded by the central or state Government, a Public Sector Undertaking or any government agency.
It also now includes public-funded universities, Indian Institute of Technology (IITs), National Laboratories and autonomous bodies established under Department of Atomic Energy (DAE), Department of Biotechnology (DBT), Department of Science and Technology (DST), Department of Pharmaceuticals, Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH), Ministry of Electronics and Information Technology and other bodies like the Defense Research and Development Organisation (DRDO), Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR) and Council of Scientific and Industrial Research (CSIR).
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“Details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board’s Report,” stated the latest amendments.
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