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Modi govt unlikely to classify donations to CM fund as CSR despite demand from states

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Prime Minister Narendra Modi | Photo: ANI
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New Delhi: The Narendra Modi government is unlikely to include contributions made to the ‘Chief Minister’s Relief Fund’ or ‘State Relief Fund’ to combat Covid-19 as corporate social responsibility (CSR) expenditure. Non-BJP-ruled states such as Kerala, Punjab, West Bengal, Rajasthan and Maharashtra wanted donations to the CM relief fund to be classified as CSR spending. 

The government is, however, of the view that since contributions to the states’ disaster management authorities to combat Covid-19 qualify as CSR expenditure, the states should have no problem in mobilising CSR funding to fight the pandemic.

“The CM relief fund is not an eligible fund to receive CSR since inception and there is no proposal as of now to do so,” said a senior government official, who did not want to be named. 

The Ministry of Corporate Affairs had issued a FAQ (frequently asked questions) earlier this month where it clarified what qualifies as CSR expenditure. 

It said contributions to the PM CARES Fund — created to collect public donations for Covid-19 — can be claimed as CSR expenditure, but contributions made to CM relief fund and state relief fund to combat Covid-19 are not eligible for deductions under CSR. 

However, contributions to the states’ disaster management authorities were eligible for the deductions.

The government had constituted the PM CARES fund last month and relaxed norms to enable companies to claim 100 per cent tax deductions on contributions made to the fund on par with the tax treatment to the PM’s National Relief fund.

Many big corporate houses, state-owned firms and individuals have announced substantial contributions to the fund set up by the Modi government on 28 March to raise funds for Covid-19.

Donations to the fund crossed over Rs 6,500 crore within a week of its formation.


Also read: Why India’s wealthy happily donate to god and govt but loathe helping needy and poor


Appeal from states

At a press conference last week, Kerala Chief Minister Pinarayi Vijayan sought changes to the Companies Act to classify donations to the CM relief fund as CSR spending.

“In a federal set-up, the relief funds set up by the states for a public purpose cannot be excluded from the eligibility criteria when the same is available for a central fund set up with similar objectives and aims,” he said. “In a letter to the Prime Minister, I have requested his intervention to correct this inequality, which is against the principles of underlying cooperative federalism and adds to the fiscal stress of the states.”

Rajasthan, Punjab, West Bengal and Maharashtra too have had a similar demand. 

Earlier this month, Punjab Chief Minister Captain Amarinder Singh had also written to the PM, asking for CM relief fund to be classified as CSR expenditure in “national interest”.

Rajasthan Chief Minister Ashok Gehlot made a similar request.

Writing to Finance Minister Nirmala Sitharaman, West Bengal Finance Minister Amit Mitra had said not including the contributions to the state fund under CSR would jeopardise the state’s efforts to raise funds to fight the pandemic. 

Routes for CSR classification

At present, companies with a net profit of Rs 5 crore or a net worth of Rs 500 crore or a turnover of Rs 1,000 crore have to spend 2 per cent of their average net profits of the last three years on CSR.

The government official quoted above explained that under Schedule VII of the Companies Act, there are two routes for an expenditure to be classified as CSR.

“One is the ‘fund’ route where the contribution per se is treated as CSR expenditure and the end utilisation is not tracked. The other is the ‘activities’ route where permissible activities are enumerated,” he said, adding the two routes cannot be read together. 

“One cannot conclude that a company can contribute to any fund regardless of whether or not it is included in Schedule VII so long as the end use pertains to admissible activities,” the official added.


Also read: Modi govt employees irked by pressure to donate to PM CARES Fund to fight Covid-19


 

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Andhra doctor, suspended for alleging PPE shortage, now beaten by cops for ‘creating nuisance’

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A doctor with a stethoscope (Representative image) | Pixabay


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Bengaluru: A doctor with a government hospital in Andhra Pradesh, who was suspended for questioning the shortage of PPE kits, was admitted to a mental health facility Sunday, a day after he was allegedly manhandled by the police and arrested for creating nuisance in Visakhapatnam.

Dr Sudhakar Rao, a government civil surgeon, was beaten, his hands tied behind his back and dragged by police officers Sunday. During the incident, Sudhakar allegedly verbally abused the Jagan Mohan Reddy government in an inebriated state. Videos of the incident have since been widely shared online.

“The police control room received a call about a person creating nuisance on Beach Road Hospital in Visakhapatnam. The Fourth Town police was rushed there and found that the person was the suspended doctor, Sudhakar.

“When the police tried to control him, he snatched the mobile phone of an officer and threw it away. He is suffering from mental disorder and he was drunk. He was sent for a medical examination,” Vishakapatnam Police Commissioner R.K. Meena told the media Sunday.

Sudhakar was admitted to a mental hospital Sunday after doctors at the King George Hospital in Vishakapatnam said he suffered from anxiety.

“Since the doctor is in anxiety and talking irrelevant things, I have referred him to a mental care hospital in Visakhapatnam,” said Dr Radha Rani, medical superintendent, King George Hospital.

A statement released by the hospital said: “Dr Sudhakar was brought to the KGH casualty ward at 6.30 pm. From the smell, it was found that he was in a drunk condition. Under the influence of alcohol, he did not cooperate with anybody there and kept abusing all. Still, his pulse, BP were checked. Pulse was 98, BP 140/100. Blood samples were sent to forensic lab to ascertain alcohol content in his blood.”


Also read: 6 toilets for 20 houses, inadequate testing: Why Mumbai’s Worli chawls are a Covid hotspot


‘Treatment towards Sudhakar was inhuman’

Sudhakar, who spent more than 10 years at the Narsipatnam Government Hospital in Andhra Pradesh, was suspended from his duties in March after he openly criticised the Reddy government for failing to provide PPE kits and N95 masks to doctors treating Covid-19 patients.

He had alleged that the state government was giving N95 masks and PPE kits meant for doctors to politicians and the police.

A video of Sudhakar criticising the government was also shared widely. In the clip, he can be heard saying: “We are putting our lives at risk here. We are asked to use the same mask for 15 days and a fresh mask will be provided only twice a month.”

Speaking to ThePrint, Dr P. Gangadhar Rao, member of the National COVID Committee of the Indian Medical Association, said the manner in which Sudhakar was manhandled by the police was “inhuman” and “violated” human rights.

“We strongly condemn the way he was taken into custody. He was not carrying a weapon, he was alone, the number of policemen outnumbered him. Why treat him like that? We also saw a video where a policeman beats him with a lathi,” said Dr Gangadhar.

He added that Rao was one of the most experienced anaesthetists the Andhra Pradesh government had.

“Our next step of action is to get Sudhakar to write an unconditional apology for having used filthy language, abusing the chief minister and the government. We will then take our appeal to the CM seeking that he be reinstated,” Gangadhar said.


Also read: Face shields, gowns, masks — the new attire for cabin crew post lockdown


 

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