The amendment to the Companies Act allowing spends for
benefits of Central Armed Police Forces and para-military forces veterans and
their dependents to be deemed as corporate social responsibility (CSR) activities
has been welcomed by leading voices in the legal fraternity.
The Ministry of Corporate Affairs (MCA), through a
notification issued on June 23, 2020, has included contributions made towards
the benefit of Central Armed Police Forces (CAPF) and Central Para-Military
Forces (CPMF) veterans and their dependents, including widows, within the remit
of CSR programmes. It was done by the MCA by amending Schedule VII
of the Companies Act, 2013, which lists activities that may be included by
companies for their CSR spending. The move will benefit Central police forces
like CRPF, SSB, CISF and ITBP.
Earlier, only contributions made for the benefit of armed
forces veterans, war widows and their dependents were counted as CSR spends for
company law purposes.
The Companies Act, which came into effect from April 1,
2014, stipulates that firms with a net worth of Rs 500 crore or more, or a
turnover of Rs 100 crore or more, or a net profit of Rs 5 crore or more during
the immediately preceding financial year are required to spend 2 per cent of
their profits on corporate social responsibility (CSR) programmes.
The legal fraternity has largely welcomed the move to
widen the scope of Schedule VII of the Companies Act, 2013.
Mansi Bidani, Partner, Law offices of Panag and Babu,
said, “The recent amendment to Schedule VII widens the scope of permitted
CSR contributions and provides an opportunity to a larger set of organsations
to tap into corporate funding. This will certainly provide an impetus to the
community service initiatives of such organizations.”
Khettry, Principal Associate of law firm Leslie & Khettry, stated “The
amendment by the Ministry of Corporate Affairs is laudable because it expands
the scope of CSR spends to CAPF and CPMF, their dependants and widows in
addition to the armed forces veterans, war widows and their dependents.
Corporates will accordingly have a wider array of opportunities for their CSR
spends. It is hoped that this move will further strengthen the CAPF and CPMF.”
Vipin Rathee. Principal partner of law firm
Dalal & Rathee Associates, said , “I believe every company should follow it
religiously to help the personnels working day in and day out for our
safety. It’s a token of gratitude towards them and this is going
to benefit martyr’s family. This fund going to help in the
rehabilitation of widows and children of martyrs who lay down their lives for
the nation. To be precise, CSR towards them is a noble initiative.”
Sonam Chandwani, Managing Partner at KS Legal & Associates, said it was a laudable step for the recognition of the sacrifices made by India’s paramilitary forces. “This widened inclusion for CSR is vital for the overall socio-economic welfare and development of the forces and their families,” she said.
By: Murtuza Merchant