Government-sponsored incubators have been made eligible for India Inc’s corporate social responsibility spending, in a major boost to startups. Finance and corporate affairs minister Nirmala Sitharaman said on Friday that research funding in science, technology, engineering and medicine will be counted as part of mandatory CSR expenditure.
The research funding by companies can go towards efforts by publicly funded universities, Indian Institutes of Technology and national laboratories towards achievement of United Nations sustainable development goals. Every year, companies with a minimum net worth of Rs 500 crore, turnover of Rs 1,000 crore, or net profit of Rs 5 crore are required to spend at least 2% of their average profit for the previous three years on CSR activities. In a previous set of announcements, the finance minister had announced that the government would not operationalise an amendment to the Companies Act that had made violations of CSR provisions punishable by up to three years in prison. A high-level government committee under corporate affairs secretary Injeti Srinivas has also recommended that CSR expenditure be made tax deductible.
Beside the additions announced by the finance minister, efforts to reduce poverty, hunger and childhood mortality, promote education and gender equality, ensure environmental sustainability and contributions to government-designated relief funds are also counted as CSR spending