This issue of LexCognito, which in Latin means 'awareness about law', seeks to provide you an insight into significant legal and regulatory developments that have taken place very recently in India.
Date: 1 August 2022
MCA Clarification on spending of CSR funds for "Har Ghar Tiranga" campaign - reg.
The Ministry of Corporate Affairs (“MCA”), vide its General Circular No. 08/2022 dated 26 July 2022, has clarified that the spending of Corporate Social Responsibility ("CSR") funds by the companies towards mass scale production and supply of the National Flag, outreach and amplification efforts and other related activities, are eligible CSR activities under Item No. (ii) of Schedule VII of the Companies Act, 2013 pertaining to promotion of education relating to culture.[1]
This step of MCA is towards 'Har Ghar Tiranga', a campaign under the aegis of Azadi Ka Amrit Mahotsav, which is aimed to invoke the feeling of patriotism in the hearts of the people and to promote awareness about the Indian National Flag.
It has been further clarified that the companies may undertake the aforesaid activities, subject to the fulfilment of the Companies (CSR Policy) Rules, 2014 and related circulars/ clarifications issued by the MCA, from time to time.
Section 135 of the Companies Act, 2013, inter alia, mandates companies having-
net worth of Rs. 500 crore or more, or
turnover of Rs. 1,000 crore or more, or
a net profit of Rs. 5 crore or more in a financial year,
to spend at least 2% of their average net profits of last 3 years towards CSR activities as per their CSR policy.[2]
Chrilegal Comment:
This clarification by the MCA has come up as generous contribution in the form of 'Har Ghar Tiranga’ campaign under the aegis of Azadi Ka Amrit Mahotsav to encourage people to bring the Tiranga home and to hoist it to mark the 75th year of India’s independence.
Our relationship with the flag has always been more formal and institutional than personal. Bringing the flag home collectively as a nation in the 75th year of independence thus becomes symbolic of not only an act of personal connection to the Tiranga but also an embodiment of our commitment to the nation-building.
The idea behind this initiative is to invoke the feeling of patriotism in the hearts of the people and to promote awareness about the Indian National Flag.
[1] Ministry of Corporate Affairs, Clarification on spending of CSR funds for "Har Ghar Tiranga" campaign- reg., General Circular No. 08/2022 having E-file no. 05/04/2022-CSR (issued on 26 July, 2022)
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