MCA permits funds spent by corporates on Covid vaccination drive awareness to count as CSR activity

The ministry of corporate affairs (MCA) has permitted the funds spent on awareness programmes and public outreach campaigns regarding the Covid-19 vaccination drive, to be classified as corporate social responsibility (CSR) activity.

These would fall under the permitted CSR activities as per the seventh schedule of the Companies Act, 2013, the ministry said in a circular on Wednesday.

Specifically, the newly permitted activities would come under the categories relating to promotion of healthcare, including preventive health care and sanitation, promoting education and disaster management, the circular said.

India Inc has been pushing the Centre to permit funds spent by corporates on vaccinating employees and local communities as CSR spends, however, the latest circular stopped short of taking this step.

Previously, the MCA had amended the CSR rules to permit companies engaged in research and development (R&D) activity of new vaccine, drugs and medical devices to categorise as CSR activity any Covid-related R&D activity even if undertaken as part of its normal course of business.

The decision, taken in August last year, was aimed at enhancing the flow of funds towards Covid-19 vaccine and drug development.

Earlier in March 2020, the ministry had allowed funds donated to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations (PM CARES) Fund by corporates to be classified as CSR spends.

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