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In a significant boost to corporate India looking to undertake CSR around the Covid-19 pandemic, the corporate affairs ministry (MCA) has clarified spending of CSR funds for setting up “makeshift hospitals and temporary Covid care facilities” would be treated as an eligible CSR activity.
This would be permitted as an eligible Corporate Social Responsibility (CSR) activity under schedule VII of the companies Act regarding promotion of healthcare, including preventive healthcare and, disaster management respectively, the MCA said in a circular.
The MCA has said that companies may undertake the activities of setting up makeshift hospitals and temporary Covid care facilities in consultations with the State governments. This will be allowed so long as companies comply with the Companies ( CSR Policy) rules 2014 and the circulars related to CSR issued by the ministry from time to time, it added.
Handy for India Inc
This clarification from MCA may come in handy for India Inc as the government had recently allowed corporate India to vaccinate their employees at the companies’ premises without them having to go to vaccination Centres.
Recently there has been a lot of debate on whether India Inc can treat the inoculation expenses that they want to spend on behalf of their employees as an eligible CSR spend or not.
While the current thinking is that the Centre may not agree to such expenses undertaken solely for employees as being counted as CSR activity, however the latest move to allow corporates to set up makeshift hospitals and temporary Covid care facilities as an eligible CSR activity would certainly encourage India Inc to take up such activities, corporate observers said.
It may be recalled that the MCA had in March 2020 said that spending of CSR funds for Covid-19 would be treated as an eligible CSR activity and that the coronavirus outbreak will be treated as a notified disaster.
Later in August 2020, the MCA went a step further to treat the R&D spend on Covid-19 vaccines, drugs and medical devices as an eligible CSR spend.
In January this year, the MCA allowed corporate India to spend its CSR funds for carrying out awareness campaigns/ programmes or public outreach campaigns on Covid-19 vaccination programmes.
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