Contributions to CM’s relief fund to be transferred to SDMA

Move follows Centre’s clarification that such donations don’t qualify as CSR expense

12/04/2020, SANJAY VIJAYAKUMAR,CHENNAI

Hard to miss: An awareness doll put up at Thiruvanmiyur on Saturday. M. KarunakaranM_Karunakaran

The Tamil Nadu government has said that all contributions made to the Chief Minister’s Public Relief Fund (CMPRF) towards efforts to combat COVID-19 will be allocated to the Tamil Nadu State Disaster Management Authority (SDMA). The move follows the Centre’s clarification that such contributions do not qualify as corporate social responsibility (CSR) expenditure.

The Ministry of Corporate Affairs said that contributions made to the PM-CARES Fund shall qualify as CSR expenditure, as per Schedule VII of the Companies Act, 2013. The Chief Minister’s Relief Fund or the State Relief Fund for COVID-19 is not included and does not qualify as admissible CSR expenditure, the Ministry said.

However, it added that contributions made to the State Disaster Management Authority to combat COVID-19 shall qualify as CSR expenditure.

“The contributions [made] to CMPRF from the date of orders of the National Disaster Management Authority, i.e., from March 24 to June 30, shall be allocated to the Tamil Nadu State Disaster Management Authority and utilised exclusively for activities to combat the spread of COVID-19,” an order issued by Additional Chief Secretary (Finance) S. Krishnan said. “We have directed the transfer of the funds to the State Disaster Management Authority, with the intention of making them eligible as CSR expenditure,” a senior State government official told The Hindu. Recently, Chief Minister Edappadi K. Palaniswami said CMPRF has received contributions to the tune of ₹101 crore.

“The Centre’s move may result in the unintended consequence of the favouring of the Central fund rather than the State government [fund]. This needs to be rectified to encourage free flow to both Central and State government [funds], based on the Corporates’ preference rather than on fine interpretation of law,” said S.E. Prabakar, a chartered accountant.