The Central government has decided to include corporate spending on measures to fight against COVID-19. Indian Finance Minister Nirmala Sitharaman has ensured the use of Corporate Social Responsibility (CSR) funds as CSR activity.
Recently, the Ministry of Corporate Affairs issued a circular stating that corporate spending related to Covid-19 activities, like promotion of healthcare, preventive healthcare, sanitation etc. would qualify for treatment as CSR.
The rules governing the CSR spending norms have been amended to allow more inflow of funds into activities to prevent people from COVID-19.
The CSR guidelines make it compulsory for huge Indian companies to allot at least 2% of average net profit for CSR activities. The norms are applicable to firms with at least Rs 5 crore net profit or Rs 1,000 crore turnover or Rs 500 crore net worth.
The World Health Organisation (WHO) has declared corona as a global pandemic. As per the current scenario, the approval to include COVID-19 into CSR spending, huge fund flow is expected to come into the healthcare segment.
As per the Industry report, in India the total CSR spending by the top 500 firms since the applicability of mandatory CSR in 2014 is likely to cross Rs 60,000 crore by the end of this month.
India has already reported around 415 confirmed cases of novel coronavirus. Over 3.35 lakh confirmed cases of COVID-19 have been reported across the globe and around 14,600 people have already died till now due to this disease.
Various Indian state governments have declared lockdowns in numerous cities considering the pandemic.