New Delh: Companies can contribute under Corporate Social Responsibility (CSR) to chief minister's relief funds and not only to PM CARES, senior Congress leader Vivek Tankha said, and asked the states to tap this resource to overcome financial burden in leading the fight against coronavirus.
"To counter the misinformation being spread about ineligibility of CM relief funds for CSR, you may consider making an appeal to industry, to donate to the state CSR funds, by clarifying the position of the state qua CSR funding," he said in a letter to all chief ministers of the states.
Tankha said the Companies Act, 2013, mandates that the private sector discharge a sense of social responsibility.
He said Schedule VII of the Companies Act lists out the various activities that are eligible for CSR funds from industry, and "I believe states should tap this resource". Tankha asked them to "ignore" the frequently asked questions (FAQs) and a circular issued last month by the Ministry of Corporate Affairs that designated the PM CARES fund as eligible to receive CSR funds and the chief minister's relief funds as not eligible for such expenditure.
"It is well established in law that FAQs cannot override the act, rules and regulations. Responses to FAQs have no force in law whatsoever," he said. Tankha, a Rajya Sabha member from Madhya Pradesh, said that Invest India, the National Investment Promotion and Facilitation Agency of India, tasked with promoting and facilitating investments, names a number of state funds, including chief minister's relief funds, in its repository of state & central funds accepting donations for COVID-19 relief.
"Admittedly funds, like the chief minister's relief fund, established by state, are undertaking activities under Schedule VII of the Companies Act, 2013, and are eligible for CSR funds," the parliamentarian said.
He said coronavirus pandemic has brought to the fore, what was envisaged by our Constitution, a strong and vibrant federal republic, where the true strength of the nation lies in empowering its states.
Over Rs 50,000 crore have been spent by the corporate for social welfare activities in the last five financial years.