April 16, 2021

Second wave of COVID-19 likely to reduce India’s economic growth

Livelihoods: According to the global rating agency, Moody’s Investors Services, the second wave of coronavirus infections in India presents a risk to its growth forecast of 13.7 percent for 2021-22. The reason: The re-imposition of lockdown and other restrictions will curb economic activity and could dampen market and consumer sentiment.

“The announced countermeasures to combat the second wave—some of which are due to remain in place at least until the end of April—risk weakening the economic recovery. However, the targeted nature of containment measures and rapid progress on vaccinating the population will mitigate the credit-negative impact,” the rating agency said.

India has been registering more than one lakh COVID-19 cases consecutively for the last 10 days, pushing the active caseload past the one million mark. Maharashtra, Delhi, Chhattisgarh, Punjab, and Haryana have imposed night curfews, and partial lockdowns, and reduced working hours in offices to limit the spread of the virus.

The International Monetary Fund (IMF) recently upgraded its FY22 growth projection for India to 12.5 percent from the 11.5 percent estimated in January, but it hasn’t factored in the country’s ongoing second wave of COVID-19 and its downside.

Moody’s expects the impact on economic activity will be less severe than that seen in 2020, given the focus on micro-containment zones to deal with the current wave of infections, as opposed to a nationwide lockdown. The rating agency also said that vaccination will be a key element in managing the second wave as authorities balance virus management against maintaining economic activity.

Read this article to know how labour rights have worsened post-lockdown.


May 20, 2021

Home Ministry extends validity period of FCRA registration certificates

Fundraising & Communications: The Ministry of Home Affairs (MHA) has issued a circular extending the validity of FCRA registration certificates to September 30th, 2021. This applies to all FCRA licences that have expired or will expire between September 29th, 2020 and May 31st, 2021. The decision to extend the deadline has been driven by the exigencies arising from the COVID-19 situation.

FCRA refers to the Foreign Contribution (Regulation) Act 2010, which permits charitable organisations based in India to raise funds from foreign sources.

The order also clarified that nonprofits that have already opened an account and have the requisite permission to receive foreign aid, can henceforth receive it only in these newly-opened accounts.

The FCRA law was amended in September 2020 to include a clause that mandated that all nonprofits receiving foreign aid must necessarily open an account in State Bank of India’s New Delhi Main Branch. The government had initially set the deadline for this account opening as March 31st, 2021; it later extended it to June 30th, 2021 after several nonprofits argued in court that there had been delays because necessary approvals from MHA had not been received.

Several organisations have not been able to receive foreign funds during the crisis caused by the second wave, and this has impacted their COVID-19 relief efforts. Relaxing the foreign funding rules could significantly help organisations ramp up their operations to help individuals, supply critical healthcare equipment, and respond to communities in rural areas.

Read this article to know how amending the FCRA can have unforeseen implications.


May 20, 2021

Corporate spending on oxygen support and medical equipment now counts as CSR

Philanthropy & CSR: The Ministry of Corporate Affairs (MCA) has issued a circular that allows corporate spending on health infrastructure for COVID-19 care to qualify as corporate social responsibility (CSR) expenditure.

This includes setting up medical oxygen generation and storage plants, manufacturing and supply of oxygen concentrators, ventilators, cylinders, and other medical equipment to counter COVID-19.  

The announcement comes at a time when all efforts are being directed towards expediting efforts to support the country’s healthcare infrastructure.

According to the circular, companies can now undertake projects and activities in collaboration with other companies using CSR funds. Additionally, they can contribute to specified research and development projects, as well as publicly funded universities and certain organisations that conduct research in science, technology, engineering, and medicine.

The government had earlier clarified that setting up makeshift hospitals and temporary COVID-19 care facilities would also be considered a CSR activity. Rajesh Verma, the Corporate Affairs Secretary, has requested businesses to consider converting vacant office buildings into COVID-19 facilities to cater to the rapidly increasing caseload.

Read this article to understand why media attention on COVID-19 deaths due to lack of oxygen in big cities has skewed donor priorities.