Promoting healthcare comes under CSR ambit, says govt

Corporate Affiars Ministry has issued an official communication making certain changes to notification on CSR issued on February 27

Activities undertaken by corporates to promote healthcare will be considered as social welfare activity under the new companies law that came into effect this month.

Under the Companies Act, 2013, certain class of companies is required to shell out at least 2 per cent of three-year annual average net profit towards Corporate Social Responsibility (CSR) activities.

The Corporate Affairs Ministry, which is implementing the Companies Act, has now clarified that promoting healthcare would come under the CSR ambit.

In this regard, the Ministry has issued an official communication making certain changes to the notification on CSR issued on February 27.

Changes have been made in Schedule VII of the new Act.

In Schedule VII, notified on February 27, it was mentioned that "eradicating hunger, poverty and malnutrition, promoting preventive healthcare and sanitation and making available safe drinking water", among others would come under the CSR ambit.

The change, in the wordings now, is 'promoting healthcare, including preventive health care'.

The move comes in the wake of many representations made to the Ministry seeking clarity on promotion of health care in the context of CSR norms.

As per the new companies law, CSR activities would have to be within India. They would apply to companies having at least Rs 5 crore net profit, or Rs 1,000 crore turnover or Rs 500 crore net worth.

Such companies would need to spend two per cent of their three-year average annual net profit on CSR activities in each financial year, beginning 2014-15 fiscal.

Livelihood enhancement and rural development projects, working towards protection of national heritage, art and culture, including restoration of buildings and sites of historical importance and works of art, setting up public libraries, promotion and development of traditional arts and handicrafts would come under CSR ambit.

Various activities aimed at reducing inequalities faced by socially and economically backward groups have been included.

Measures for the benefit of armed forces veterans, war widows and their dependents, setting up homes and hostels for women and orphans, setting up of old age homes, day care centres and such other facilities for senior citizens would be considered as CSR work.

Other CSR activities include ensuring ecological balance, protection of flora and fauna, animal welfare, agro-forestry, conservation of natural resources and maintaining quality of soil, air and water.