The government has permitted companies to spend their CSR (corporate social responsibility) funds on activities relating to the ‘Har Ghar Tiranga’ campaign.

The Centre is organising the campaign, as part of the Azadi Ka Amrit Mahotsav, to encourage people to bring home the national flag and hoist it on the occasion of the 75th year of the country’s independence on August 15.

According to a circular by the ministry of corporate affairs, the campaign is aimed invoking patriotism among people and promote awareness about the Tricolour.

According to the Companies Act, firms with a net worth of Rs 500 crore or more, or a turnover of Rs 1,000 crore or above, or net profit of `5 crore or more, are required to spend 2% of their average net profit of the preceding three years on CSR activities. Defaults are treated as a civil offence.

The ministry’s circular said: “Spending of CSR funds for the 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.”

The activities are made eligible for CSR funds under the provisions of Schedule VII of the Companies Act, which deal with the promotion of education relating to culture.

Spending on CSR across states stood at Rs 24,864 crore in the pandemic year of FY21, little changed from that of Rs 24,888 crore in the previous year, according to the data available with the official CSR portal. Maharashtra, Gujarat, Karnataka, Delhi and Tamil Nadu were major recipients of CSR funds in FY21.

The CSR spending is typically a process driven by the board of a company, which is empowered to plan, decide, execute and monitor activities based on the recommendations of its CSR committee. The government does not direct companies to spend CSR funds in a particular geographical area or on a specific activity. However, it stipulates activities that are eligible for CSR funds for consideration by the companies.

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