The Ministry of Corporate Affairs (MCA) has issued a circular stating that said that funds spent by companies to combat the novel coronavirus will be eligible to be classified as CSR activity.
“Keeping in view of the spread of novel Corona Virus (COVID-19) in India, its declaration as pandemic by the World Health Organisation (WHO), and, decision of 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,” a circular issued by the Ministry of Corporate Affairs dated 23 March 2020 said. The current outbreak will be treated as a notified disaster, says the Ministry.
Funds may be spent for various activities related to COVID-19 under item (i) and (xii) of Schedule VII relating to promotion of health care, including preventive health care and sanitation, and, disaster management. Further, as per General Circular No. 21/2014 dated 18 June 2014, items in Schedule VII are broad based and may be interpreted liberally for this purpose. This issues with the approval of the competent authority, the MCA circular stated.
At such a sensitive stage of the pandemic in India, this clarification by the MCA is a timely and welcome step. Contributions made by corporates from their existing CSR funds to the activities specified in the MCA Circular would serve as a major support to healthcare sector and boost the rehabilitation efforts.