Redesigning Of CSR Regime

The Ministry of Corporate Affairs ("MCA") by way of notification dated January 22, 2021, brought into effect the Companies (Corporate Social Responsibilities Policy) Amendment Rules, 2021 ("CSR Rules"). The CSR Rules aims to enhance transparency and disclosures with respect to CSR activities. These amendments in CSR Rules have been proposed with an aim to ensure strict compliance with the provisions of the said rules and also an attempt to preclude any mala-fide use of CSR funds by the companies. Some of the key takeaways from the amendments are as follows:

1. Amendment in the definition of Corporate Social Responsibility ("CSR")¹

Keeping in mind the current pandemic situation, the CSR Rules have modified the definition of CSR to clarify that the activities undertaken in pursuance of normal course of business of the company shall not be included within the definition of CSR. However, the CSR Rules have made an exemption stating that the companies that are