Spend towards police, paramilitary personnel to be counted as CSR

KR Srivats New Delhi | Updated on July 12, 2020 Published on July 12, 2020

Govt amends Schedule VII of Companies Act to broad-base inclusion

The Centre has allowed corporate spends towards the benefit of Central Armed Police Forces (CAPF) and Central Para Military Forces (CPMF) veterans and their dependants, including widows, to be counted as corporate social responsibility (CSR).

Till recently, only measures for the benefit of armed forces veterans, war widows and their dependants were considered as allowed CSR spend for company law purposes.

Under Indian company law, corporates of a certain turnover and profitability are required to spend 2 per cent of their average net profit for the past three years on CSR. For the latest move, the corporate affairs ministry (MCA) has amended Schedule VII of the Companies Act, 2013. Schedule VII lists out the activities that may be included by companies in their CSR policies. Currently, CSR expenditure made on armed forces veterans, war widows and dependants account for a very small proportion of the total CSR spend in the country.

The CAPF consists of Assam Rifles, Border Security Force (BSF), Central Industrial Security Force (CISF), Central Reserve Police Force (CRPF), National Security Guard (NSG) and Sashastra Seema Bal (SSB).

Welcome move

Sandeep Grover, Partner, Ortis Law Offices, said the MCA move to broadbase the scope of CSR by including the contributions made towards the benefit of CAPF and CPMF veterans and their dependents, including widows, is a praiseworthy move by the Government and acknowledged the unconditional efforts and sacrifices made by armed police forces such as BSF and CRPF over the years. “ In no way can the service spirit and passion be treated as less than that of Indian Army”, he said.

Harish Kumar, Partner, L&L Partners, said this enhanced scope of CSR contribution to include CAPF, CPMF veterans and their dependents would serve intended objectives of such CSR spend, given this broad-based inclusion.

Prasenjit Chakravarti, Partner, Khaitan & Co, expressed hope that the MCA move will spur Indian companies to make substantial contributions towards their CSR expenditure for the benefit of CAPF and CPMF veterans and their dependents.

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Published on July 12, 2020
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