Background: Section 135 of the Companies Act, 2013 lays down the provisions relating to company’s Corporate Social Responsibility (“CSR”). CSR is the responsibility that a company owes towards the environment and the society in which it functions.

Legal Update: By a notification dated 11 October, 2019, Ministry of Corporate Affairs (“MCA”) made an amendment to Schedule VII, item (ix) of the Companies Act which increases the ambit of CSR contributions made to the Centre and State funded technology incubators.  Schedule VII lays down the activities which may be included by companies in their CSR Policies.

Before the notification, item (ix) of this schedule stood as, “Contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government”. 

 The amended item (ix) now includes contributions made to

  • incubators which are funded by Central Government or the State Government or any agency or PSU of the State or Central Government
  • Indian Institute of Technology (IITs), National Laboratories and Autonomous Bodies (established under the auspices of Indian Council of Agricultural Research (ICAR), Indian Council of Medical Research (ICMR), Council of Scientific and Industrial Research (CSIR), Department of Atomic Energy (DAE), Defence Research and Development Organisation (DRDO), Department of Science and Technology (DST), Ministry of Electronics and Information Technology) engaged in conducting research in science, technology, engineering and medicine aimed at promoting Sustainable Development Goals (SDGs).

Key Inference: By the amendment, the Government has focused on the development of States Government funded incubators as well. This can be seen as a furtherance in compliance of the statutory provision that a company should give preference to the local areas where it functions.


October 11th, 2019