Govt amends CSR norms to allow pharma firms to contribute to COVID-19 RnD; Details

The government is allowing investment towards such efforts to be considered as fulfillment of a company's Corporate Social Responsibility (CSR) obligations.

As per the Gazette notification;

"Any company engaged in research and development activity of new vaccine, drugs and medical devices in their normal course of business may undertake research and development activity of new vaccine, drugs and medical devices related to COVID-19 for financial years 2020-21, 2021-22 and 2022-23 subject to the conditions."

The notification further stated the conditions, wherein, the spending will have to be made in financial years 2020-21, 2021-22, and 2022-23 and the R&D should be carried out in collaboration with the government nominated institutes or organizations.

"Such research and development activities shall be carried out in collaboration with any of the institutes or organizations mentioned in item (ix) of Schedule VII to the Act. And, details of such activity shall be disclosed separately in the Annual Report on CSR included in the Board's Report." the notification read.

The item (ix) of Schedule VII includes public-funded Universities, Indian Institute of Technology (IITs), National Laboratories and Autonomous Bodies (established under the auspices of Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Council of Scientific and Industrial Research (CSIR), Department of Atomic Energy (DAE), Defence Research and Development Organisation (DRDO), Department of Biotechnology (DBT), Department of Science and Technology (DST), Ministry of Electronics and Information Technology.

The amendment has also temporarily removed a provision that would have excluded "activities undertaken in pursuance of its (the company's) normal course of business" from being considered as CSR activities.

In the normal course, such institutes and organizations, "or any other" central or state fund for socio-economic development and relief, as well as funds for the welfare of Scheduled Castes, Scheduled Tribes, other backward classes, minorities, and women.

However, with the amendment, Schedule VII will substitute it with incubators or research and development projects in the field of science, technology, engineering, and medicine that are funded by the central or state Government, a Public Sector Undertaking or any government agency.

Also Read: India Will Get COVID-19 Vaccine By 2020 End: Union Health Minister