NEW DELHI: The ministry of corporate affairs (MCA) announced that funds spent on measures to tackle the Covid-19 outbreak will be counted towards the corporate social responsibility (CSR) activity of companies, in a circular on Monday.

“Keeping in view of the spread of novel Coronavirus (COVID-19) in India, its declaration as a pandemic by the World Health Organisation (WHO), and, decision of the 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,” the notification said.

The MCA said that funds spent on promotion of healthcare, including preventive healthcare and sanitation and on disaster management would be within the definition of a company’s CSR obligations.

The circular clarified that the broad based items as per Schedule 7 of the CSR policy, which deals with the activities that constitute CSR activity, may be interpreted liberally for this purpose.

As per the amended Companies Act, the government has made it mandatory for companies to spend 2% of their average net profit of the last three years on CSR activities.

Recently Indian industry bodies like the Confederation of Indian Industry (CII) and the Associated Chambers of Commerce and Industry of India (ASSOCHAM) had suggested the government take this measure to direct the pooled resources of the private sector towards fighting the virus outbreak.

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