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Coronavirus impact: Will COVID-19 change the contours of CSR in India?

Funding for social projects will be severely impacted in the coming year, at least till the time the epidemic is not eradicated from India.

May 14, 2020 / 02:13 PM IST
CSR

CSR

Shashwat DC

It was sometime in the first week of March that I was conferring the economic scenario with a CSR head at one of the top banks in India. At that time, there were quite a handful of COVID-19 cases in India, but it had not taken hold of our consciousness, the way it has now. During the interaction, the CSR head grimaced that he was feeling the heat to curtail the CSR spend, due to the lackadaisical performance of the company in light of the economic slowdown. "God forbid, if we have a pandemic scenario, then my CSR spend will all be gone." His premonition was ominous. In a matter of two weeks, India had moved from a country immune to coronavirus pandemic to a nation being gripped by it. By the end of the month, the biggest lockdown in the world was in place, and the country was quarantined for good.

With the COVID-19 epidemic spreading far and wide in the nation, the government got into a fire-fighting mode. The changed priorities also resulted in some tough decisions. The lockdown resulted in a complete shutdown of economic activity. Only businesses that were deemed as "essential" were allowed to operate like medical stores, food providers, and so on. To solidify the fight against the pandemic, Prime Minister Narendra Modi announced the setting up of Prime Minister's Citizen Assistance and Relief in Emergency Situations Fund or PM CARES Fund. Quite like the PM National Relief Fund, corporates and individuals could donate to this special fund that was targeted for relief for the epidemic solely. To seduce the corporate sector into writing cheques, the government on March 31, announced that donations to the PM CARES Fund would get tax breaks under Section 80G of the Income Tax Act. This galvanised contributions to the fund. Almost overnight, significant sums flowed into the fund from the corporate sector. Every top corporate in India announced its contribution to the fund, showcased as its approach to social relief.

What was not explicitly mentioned was that these contributions could be made from the CSR (Corporate Social Responsibility) kitty that the company was already under an obligation to make.