Companies in India will now be able to count all expenditure done towards disaster relief activities as part of their required annual Corporate Social Responsibility (CSR) spend. This move came after the ministry gave special dispensation to companies to include disaster relief expenditure as CSR last year after flooding in Kerala and this year after Cyclone Fani hit Odisha.
The Ministry of Corporate Affairs has included “disaster management including relief, rehabilitation and reconstruction activities” in a list of activities that business organization are permitted to count towards their CSR spend.
The corporate affairs ministry has included “disaster management including relief, rehabilitation and reconstruction activities” in a list of activities that companies are permitted to count towards their CSR spend through an official notification.
All companies with a net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more or net profits of Rs 5 crore or more are required to spend 2% of their average profits of the previous three years on CSR activities every year.
Besides disaster relief activities, the list of activities that can be counted towards CSR include, hunger and poverty alleviation activities, promotion of education and vocational training, and promotion of gender equality.
Expenditure towards combating diseases especially, HIV AIDs and malaria, reducing infant and maternal mortality and donations to relief funds set up by Central and State governments are also counted towards CSR expenditure.