India Floods – A Clarion Call for India Inc to Amend their CSR Policy

0
226

Mumbai, August 12, 2019: India is facing a natural calamity in the form of catastrophic floods across the country leading to collateral damage, both in terms of human life as well as economic losses to rebuild the collapsed infrastructure in several States. This is a call of duty for India Inc to rise to the occasion and generously contribute from their CSR kitty towards this noble cause.

The development assumes significance since, under the new Corporate Social Responsibility norms ratified by the Parliament recently, unspent CSR amount would be transferred to an escrow account for three financial years. Subsequently, if the amount remains unspent then the same would be moved to funds specified in Scheduled VII of the Companies Act.

Reacting to these norms in the given context of flood disasters in India, Makarand Joshi, Partner, MMJC & Associates LLP – a corporate compliance firm, said: “Many companies are worried whether their contribution to flood relief will qualify/be eligible to be claimed under CSR or not? MCA has recently amended Schedule VII of the Companies Act, 2013 to cover disaster management, including relief, rehabilitation and reconstruction as category eligible under CSR. In order to ensure such contribution qualifies CSR, companies need to ensure that:
(1) their CSR policy is amended suitably to cover this amendment in their policy.
(2) Undertake a project (directly or via eligible NGO) by identifying a suitable project and not just donate money.”