New Delhi (IANS) The Ministry of Corporate Affairs has said that donations made by companies to the Prime Minister's Citizens Assistance and Relief in Emergency Situations Fund (PM CARES Fund) will be considered as expenditure on corporate social responsibility.
In a tweet on Sunday, Finance Minister Nirmala Sitharman said that CSR Funds can now donate to PM CARES Fund.
"The PM CARES Fund has been set up to provide relief to those affected by any kind of emergency or distress situation. Accordingly, it is clarified that any contribution made to the PM CARES Fund shall qualify as CSR expenditure under the Companies Act 2013," said a circular by the Ministry of Corporate Affairs.
The decision comes days after the government decided to include corporates' spending on checking coronavirus as part of the Corporate Social Responsibility.
Corporate spending for various activities related to COVID-19 including promotion of healthcare, preventive healthcare, sanitation, disaster management would qualify for treatment as CSR, as per a previous circular by the ministry.
The corporate social responsibility rules make it mandatory for large Indian firms to set aside at least 2 per cent of their average net profit for socially responsible expenditures. 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 list of activities included under CSR is decided by the government.
Companies have off late announced donations to the PM CARES Fund along with several other initiatives to combat with the coronavirus pandemic.
The total corporate social responsibility (CSR) spending by the top 500 companies in the country since the applicability of mandatory CSR in 2014 is likely to cross Rs 60,000 crore by the end of the month as per industry reports.