Companies spending on relief material for flood-ravaged Kerala will reportedly be allowed to log those contributions as part of their mandated two percent spending on corporate social responsibility (CSR) initiatives.
Schedule 7, Section 135 of the Companies Act, 2013, which outlines CSR guidelines, does not list disaster relief. However, a top corporate affairs ministry official has told The Economic Times that companies can club relief material under heads such as medical aid, sanitation, and providing housing and shelter.
Companies donating to the chief minister's relief fund are already covered under the CSR provision of the Companies Act, the newspaper added.
The deluge that ravaged Kerala this month has shaved off at least 2.2 percent of state GDP, which will push up Kerala's fiscal deficit to 5.4 percent this fiscal, said a report.
According to an initial estimate by rating agency Acuit Ratings (earlier Smera Ratings), the flood has shaved off at least 2.2 percent or nearly Rs 10,800 crore of state GDP. Without central grants-in-aid, state fiscal deficit may exceed 5.4 percent this financial year compared to 3.2 percent in FY18.
Tourism and agro-based industries are expected to suffer severe losses given the damages to infrastructure and crops/plantations.
Most of Kerala was marooned between 8 August and 20 August. Around 260 people have been killed and over 1.5 million were driven out of their homes, the PTI reported.
India has made CSR compulsory for a company if the net worth of the firm is Rs 500 crore or more; the annual turnover of the firm is Rs 1000 crore or more; or the annual net profit of the firm is Rs 5 crore.
With inputs from PTI