The MCA clarification expected to be a booster dose for several corporates
In a significant move that could boost the creation of health infrastructure for Covid care, the corporate affairs ministry (MCA) on Wednesday clarified that spending CSR funds for the establishment of medical oxygen generation and storage plants; manufacturing and supply of oxygen concentrators, ventilators, cylinders and other medical equipment for countering Covid are eligible CSR activities under company law.
This clarification is expected to come as a booster dose for several corporates who had recently voluntarily come forward to provide medical oxygen supplies in this hour of need and even resorted to imports of cryogenic tankers to help fulfil the unexpected oxygen demand in the country. This MCA clarification is also expected to encourage corporates to manufacture of oxygen concentrators, ventilators and cylinders in the country, say corporate observers. It will encourage corporates to come forward and supplement government efforts in fulfilling the rising hospitalisation needs given the second Covid-19 surge, they said.
It may be recalled that MCA had in March 2020 clarified that spending of Corporate Social Responsibility (CSR) funds for Covid-19 is an eligible CSR activity. Now MCA has further clarified that spending of CSR funds for creating health infrastructure for Covid care is also an eligible CSR acactivity.
MCA has now advised in a circular — tweeted by Finance Ministry on Wednesday —that companies, including government companies, may undertake the activities or projects or programmes using CSR funds, directly by themselves or in collaboration as a shared responsibility with other companies, so long as existing rules around CSR policy and guidelines issued by the Ministry from time to time are adhered.
