Can CSR Funds Pay for Anganwadi Work? | Schedule VII

Common questions

Can CSR funds be used for Anganwadi work?

Anganwadi work generally maps to Schedule VII activity areas, in particular education and, where the project scope includes them, healthcare, nutrition and sanitation. Schedule VII sets out the activity areas; it does not pre-approve any individual project. Whether a specific Anganwadi project qualifies as CSR expenditure for a specific company in a specific financial year is a determination for that company’s CSR committee and Board, advised by its own auditors and counsel, against the current text of the Companies Act, 2013 and the CSR Rules.

Does Smart Anganwadi need CSR-1 registration to work on our CSR project?

CSR-1 registration is prescribed for entities through which a company undertakes its CSR activities, and those entities also have to meet the legal-form and 12A/80G conditions in Rule 4 of the CSR Rules. Smart Anganwadi is a brand of Arihant Enterprises, a for-profit execution and supply vendor engaged under a purchase or work order and paid against invoices for delivered goods and completed work. We are not registered as a CSR implementing agency and do not hold a CSR Registration Number. If your structure requires funds to pass through an implementing agency, that agency should meet the Rule 4 conditions and have filed CSR-1, and we then work as that agency’s vendor. Please confirm the position with your own advisers.

Can a company pay a vendor directly out of its CSR budget?

Companies commonly run a CSR project themselves and procure the goods, works and services the project needs from ordinary suppliers against invoices. The implementing-agency conditions in the CSR Rules attach to entities through which CSR activity is undertaken rather than to routine procurement of goods and services. Whether a particular arrangement is treated as a company-implemented project or as implementation through an agency depends on the facts of the contract and the flow of funds, and is a call for your Board and advisers, not for us.

Is transferring money to an NGO the same as having spent it?

Do not assume it is. Rule 4(5) of the CSR Rules requires the Board to satisfy itself that the funds disbursed have been utilised for the purposes and in the manner it approved, and requires the Chief Financial Officer or the person responsible for financial management to certify to that effect. That is why the delivery, measurement, installation and handover records matter as much as the transfer advice. Treatment of unspent or advanced amounts in a given financial year should be confirmed with your statutory auditor.

Who ends up owning the assets created at the centre?

The CSR Rules address who may hold a capital asset created or acquired out of CSR spend | broadly, a Section 8 company, registered public trust or registered society having charitable objects and a CSR Registration Number, the beneficiaries of the project, or a public authority. Anganwadi centres sit within the State Women and Child Development or ICDS system, so asset holding is normally settled with the concerned public authority before work begins and recorded in the handover note. Confirm the applicable rule text and your intended structure with your advisers.

Do you provide CSR funding, grants or Anganwadi jobs?

No. We are a tech-enabled implementation and execution partner. We do not provide grants, funding, loans, sponsorship or any assistance or government financial support, we do not receive CSR funds as an implementing agency, and we do not recruit or appoint Anganwadi Karyakartas or Sahayikas. If you are looking for funding or for a job at an Anganwadi centre, this is not the right place and we would rather tell you that now than waste your time.