The Central Government expands the purview of CSR contributions

The Central Government has notified amendments to the Companies Act, 2013 by a notification dated 24^th August 2020. The amendment brings forth changes to Schedule VII of the Act, which lists a series of activities that may be undertaken by companies under their Corporate Social Responsibility (CSR) Policies.

The amendment now includes two types of contributions in the list as follows:

• Contribution to incubators or Research & Development (R&D) projects in the field of science, technology, engineering and medicine, funded by the Central Government or State Government or any agency thereof, or by a Public Sector Undertaking (PSU) and

• Contributions to any of the following:

1. Public funded Universities;
2. Indian Institute of Technology (IITs);
3.  National Laboratories and autonomous bodies established under the Department of Atomic Energy (DAE);
4.  Department of Biotechnology (DBT);
5. Department of Science and Technology (DST);
6. Department of Pharmaceuticals;
7. Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homoeopathy (AYUSH);
8. Ministry of Electronics and Information Technology and other bodies engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs) such as
9.  Defense Research and Development Organisation (DRDO);
10. Indian Council of Agricultural Research (ICAR);
11.  Indian Council of Medical Research (ICMR) and
12. Council of Scientific and Industrial Research (CSIR)

This amendment has enhanced the list of bodies to which companies are permitted to make contributions, for the purposes of CSR. Prior to this amendment, the list did not include the DBT, Ministry of AYUSH or the Department of Pharmaceuticals.  

Furthermore, the amendment now also permits contributions to R&D projects, in the field of science, technology, engineering and medicine, funded by the Central/ State Government/ any agency thereof/ by PSUs. This provision was also absent prior to the present amendment.

Therefore, by virtue of this amendment, companies can undertake contribution to these additional bodies as well as specified R&D projects as part of their CSR activities.