NEW DELHI: Life sciences companies with research and development (R&D) activities can now spend their corporate social responsibility (CSR) funds for finding therapies for covid-19, according to new rules by the ministry of corporate affairs.
Such CSR spend, however, will be subject to certain riders, as per the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2020, notified on Monday.
The new rules remove the restriction on life sciences companies and others on spending their CSR funds in activities which are part of their normal course of business.
As per the new rules, companies engaged in R&D of new vaccine, drugs and medical devices in their normal course of business may conduct R&D activity of new vaccine, drugs and medical devices related to covid-19 for FY21-23. Such research work, however, has to be done in partnership with specified public institutions. Also, details of such research have to be disclosed separately in the annual CSR report which is included in the report of board of directors.
Contribution to incubators or R&D projects funded by central and state governments or state-owned enterprises will qualify as CSR spending. The other institutions with which life science companies can partner include public funded universities, IITs, national laboratories, institutions under Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Council of Scientific and Industrial Research (CSIR) and various other central ministries and departments that conduct research. This list was expanded by way of an amendment to Schedule Seven of the Companies Act, also notified on Monday.
Companies with net worth of ₹500 crore or more, or a turnover of ₹1,000 crore or more, or net profit of ₹5 crore or more, are required to spend 2% of their average net profit of the preceding three years on CSR activities.
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