Clarification on spending of CSR funds for ‘Har Ghar Tiranga’

‘Har Ghar Tiranga’ is a campaign organized by Azadi Ka Amrit Mahotsav to encourage people to carry the Tiranga home and hoist it to commemorate India’s 75th year of independence. We’ve always had a more official and institutional relationship with the flag than a personal one. Bringing the flag home as a country in the 75th year of independence becomes symbolic of not just a personal connection to the Tiranga but also of our dedication to nation-building. The initiative’s goal is to instill patriotism in the hearts of the people and raise knowledge of the Indian National Flag.
This article is about the clarification on spending of CSR funds for Har Ghar Tiranga, & the objectives/ advantages of CSR.

Short Glimpse

The Ministry of Corporate Affairs (MCA) has clarified how corporate social responsibility (CSR) funds for the “Har Ghar Tiranga” campaign would be spent. ‘Har Ghar Tiranga,’ a campaign run by Azadi Ka Amrit Mahotsav, aims to instill patriotism in the hearts of the people and raise awareness of the Indian National Flag.

The Ministry clarified in its circular that “it is clarified that spending of CSR funds for activities related to this campaign, such as 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 the promotion of education relating to culture.”

The “Har Ghar Tiranga Abhiyan”

The Har Ghar Tiranga campaign has been established to commemorate Azadi ka Amrit Mahotsav and to encourage people to bring their national flag home and display it to mark India’s 75th anniversary of independence. The purpose of this campaign, according to the Government of India, is to create a personal link with the flag and have it represent unity in the country. The Har Ghar Tiranga Abhiyan will instill patriotism in the populace and create awareness of the flag.

Registration for the Har Ghar Tiranga Campaign 

The citizens of India were requested by the Prime Minister to get register by following the procedure:

• Please go to https://harghartiranga.com/.
• Choose a profile picture
• Fill out your name and contact details.
• Give the website permission to access your location.
• Attach a flag to the location.
• After successfully pinning your location, you may acquire and download the certificate.

Of course, the Indian government conducts different social programs throughout the country. The government invests billions of rupees in initiatives such as Make in India and Beti Bachao, Beti Padhao. Large firms collaborate closely with the government to ensure the success of these efforts through CSR or Corporate Social Responsibility. Because of business assistance, several government programs like Namami Gange and Swachh Bharat Abhiyan are producing outstanding outcomes.

Let us discuss the concept of CSR in detail before we shall move on to discuss Clarification on the spending of CSR funds for ‘Har Ghar Tiranga’.

Concept of CSR or Corporate Social Responsibility

Companies registered under Section 135 of the Companies Act, 2013, are required by law to practice corporate social responsibility. Every company registered under the statute is required to practice CSR.

It is a self-regulating paradigm to which enterprises must adhere in order to become socially accountable to the company, its stakeholders, and society. Compliance with Indian legislation is required of all businesses.

CSR actions contribute to a positive environmental impact. Companies have a responsibility to the community and the environment. Companies that meet the stipulated conditions must invest at least 2% of their average net earnings, according to Indian legislation. CSR allows businesses to have a positive effect and demonstrate their genuine societal responsibility.

Want to get your company registered? Get your company registered through Legal Window. We also register the companies such as Section 8 Company, Nidhi Company, One Person Company, Producer, and NBFC Company.

Objectives of Corporate Social Responsibility (CSR)

One of the primary goals of CSR activity is to give back to the community the space and resources that it offers. It benefits the community by coordinating activities that are necessary for upholding community norms. It is something that will help society. Every contribution provided by the organizations results in a positive transformation that society needs. However, when it comes to CSR being a positive contributor to society. It also acts as an excellent business model for companies. CSR is a corporate activity that welcomes new consumers and boosts the company’s investment rate. CSR shapes the business environment in such a way that the organization gets known and the business becomes lucrative.

Advantages of Corporate Social Responsibility (CSR)

The following are the advantages of Corporate Social Responsibility (CSR):

• Increases the face value of the brand  
• Creates a favorable image for the company in society 
• Has exceptional powers to attract new and potential consumers
• Increases employee retention while simultaneously attracting new workers
• Allows businesses to promote their products and services in the market.
• Improves the quality of life in society

Now, we have discussed CSR and now we are able to relate this concept with the Campaign introduced by the Government hence, now we shall be moving on to discuss Clarification on the spending of CSR funds for ‘Har Ghar Tiranga’.

Clarification on the spending of CSR funds for ‘Har Ghar Tiranga’

The Ministry of Corporate Affairs (MCA) confirmed in General Circular No. 08/2022, issued July 26, 2022, that money spent on the ‘Har Ghar Tiranga’ campaign will be deemed an approved CSR activity under the Companies Act, 2013.

• Clarification from the MCA on the use of CSR funding for the “Har Ghar Tiranga” Campaign

The government has stated that spending CSR funds for activities such as mass manufacturing and supply of the National Flag, outreach and amplification efforts, and other relevant activities are qualified CSR activities under item no. (ii), Schedule VII of the Companies Act, 2013.

“It is clarified that spending CSR funds on activities related to this campaign, such as mass 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 the promotion of education relating to culture,” according to an MCA circular.

‘Har Ghar Tiranga’ is a campaign organized by the Azadi Ka Amrit Mahotsav to encourage people to carry the Tiranga home and hoist it to commemorate India’s 75th year of independence.

Companies having a net worth of 500 crores or more, a turnover of 1,000 crores or more, or a net profit of 5 crores or more in the previous three years are required by the Companies Act, 2013 to spend 2% of their average net profit on CSR initiatives.

Meanwhile, as part of the Central Government’s Har Ghar Tiranga campaign, over 1.6 lakh post offices will begin providing residents with flags on August 1. The administration is also considering developing rules for flag collecting, recycling, and disposal.

Punishment for Non-compliance with CSR

If a company fails to comply with the terms of Section 135, it is subject to the punishment specified in sub-section (6) of Section 135, which says that the fine cannot be less than Rs 50,000/- and cannot exceed Rs 25 lakh. Every officer implicated in such noncompliance will face three years in prison or a punishment of at least Rs 50,000, which can be increased to Rs 5 lakh, or both.

On any non-compliance, the MCA has the authority to issue directions to comply with the stated regulations.

Takeaway

The actions of CSR are governed by land law. It requires corporations to obey the rules established by Indian law through the Companies Act, of 2013. Companies may use CSR to demonstrate their care for society and receive the deserved accolades. It is a high return on investment strategy in addition to bringing about social transformation. Indian law controls these activities in a knowledgeable manner. This makes it simple for businesses to comply on a regular basis as required.