MCA Update - Corporate Social Responsibility (FY 2021-22)

In the Financial Year 2021-22, the Ministry of Corporate Affairs (“MCA”), vide 2 (two) General Circulars dated April 22, 2021 and May 5, 2021, introduced additional corporate social responsibility (“CSR”) activities to support the ongoing fight against Covid-19 pandemic, in extension of the original MCA General Circular No. 10 / 2020 dated March 23, 2020 which first stipulated that spending of CSR funds for Covid-19 shall be eligible CSR activity under Section 135 and Schedule VII of the Companies Act, 2013.

The companies including government companies are encouraged to undertake the activities, projects or programmes prescribed as CSR spending, directly by themselves or in collaboration as shared responsibility with State Governments or other companies, subject to fulfilment of Companies (CSR Policy) Rules, 2014 and the CSR circulars issued by MCA.

Stakeholders can now undertake the following activities as CSR activities under items (i) and (xii) of Schedule VII of the Companies Act, 2013, relating to promotion of health care, including preventive health care and disaster management respectively:

  1. Under General Circular No. 05/2021 dated April 22, 2021
    Spending CSR funds for setting up makeshift hospitals and temporary Covid-19 care facilities.
  2. Under General Circular No. 09/2021 dated May 5, 2021
    Spending CSR funds for:

    • creating health infrastructure for Covid-19 care;
    • establishment of medical oxygen generation and storage plants;
    • manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment for countering Covid-19.

Given the ongoing Covid-19 crisis in the country, especially the severely overwhelmed healthcare infrastructure and acute oxygen shortage, stakeholders should consider spending for these activities not by choice, but as a dire necessity.

Dated: May 6, 2021

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