Mr Corporate, only PM cares Centre extends scope of CSR donations, leaves out CMs’ funds

Companies can donate to the PM CARES Fund for Covid-19 under the corporate social responsibility (CSR) category but the same classification will not be granted if they contribute to the Chief Minister’s Relief Fund or the State Relief Fund for the virus relief, the Centre has clarified. The clarification by the Union corporate affairs ministry on Friday night has triggered cries of “blatant discrimination” and prompted the Kerala government to convene a webinar of non-BJP finance ministers to mobilise opinion and present a collective case before the Centre to expand the scope of CSR coverage. “Corporate social responsibility…. Now, applicable even to the PM-CARES Fund. Then why not for the chief ministers’ relief funds? This is not correct. This is bulldozing the federal structure, I said. There should not be such discrimination,” Bengal chief minister Mamata Banerjee said in Calcutta on Saturday after interacting with the Prime Minister earlier in the day over video.


The CSR kitty is a significant source of donations as large companies are required to spend at least 2 per cent of their net profits on such activities, and the total spending by the top 500 companies under this head since 2014 is expected to cross Rs 60,000 crore soon. The CSR norms are applicable to firms with a net profit of at least Rs 5 crore or a turnover of Rs 1,000 crore or net worth of Rs 500 crore. Several corporate giants have made sizeable contributions to the PM CARES Fund. But the lack of transparency and the convoluted attempt at coining the acronym (PM CARES stands for “Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund” with the immediate stress on Covid-19) have prompted suggestions that the fund is being used as a vehicle to glorify the incumbent Prime Minister. The country already has a Prime Minister’s National Relief Fund (PMNRF), which was set up in pursuance of an appeal by then Prime Minister Jawaharlal Nehru in 1948. Originally intended at assisting those displaced from Pakistan, the PMNRF now offers relief to families of victims of natural calamities, major accidents and riots. On Friday night, the Union corporate affairs ministry clarified in an entry in the segment on frequently asked questions: “The Chief Minister’s Relief Fund or the State Relief Fund for Covid-19 is not included in Schedule VII of the Companies Act, 2013, and therefore, any contribution to such funds shall not qualify as admissible CSR expenditure.” The ministry said such contributions could be made to the State Disaster Management Authority for fighting the coronavirus, which would qualify as CSR contribution.