Indian Govt Offers Tax Breaks To Startups Turning Office Space Into Covid Wards

Amid the deadly second wave of Covid, with hospitals facing an acute shortage of beds and other facilities, the Indian government is looking to rope in empty office space for use as Covid wards. The Ministry of Corporate Affairs (MCA) has issued a circular clarifying that companies and startups that are spending funds to set up makeshift hospitals and temporary Covid care facilities can treat it as an eligible corporate social responsibility (CSR) activity. 

The MCA further requested companies to dedicate vacant office space to set up Covid isolation wards and beds to cater to the increasing number of cases across the country. With a record single-day spike of 3,46,786 new coronavirus infections, India’s total tally of Covid-19 cases climbed to 1,66,10,481 while active cases crossed the 25 Lakh mark, according to the Union health ministry data updated on April 24 2021.

“It is clarified that spending CSR funds for Covid-19 is an eligible CSR activity, it is further clarified that spending of CSR funds for ‘setting up makeshift hospitals and temporary covid-19 care facilities’ is an eligible CSR activity.”

In March last year, the MCA had said the coronavirus pandemic is a notified disaster and spending of funds under CSR to tackle the spread of Covid-19 would be treated as an eligible CSR activity. Then in August 2020, the MCA went a step further to treat spending for research and development of Covid-19 vaccines, drugs and medical devices as an eligible CSR expense.

In January this year, the MCA allowed startups and companies to spend its CSR funds for carrying out awareness campaigns or public outreach campaigns on the Covid-19 vaccination campaign however, barred the usage of such funds exclusively on activities that benefitted the company’s employees and family.

A number of startups are also helping health authorities meet the gap in the supply of critical medical devices and equipment. Last year, Vijay Shekhar Sharma-led Paytm partnered with more than 300 hotels in 60 cities to offer temporary accommodation for the medical practitioner on the frontline. Paytm also invested INR 5 Cr to financially support innovators and companies that are working on solutions for the potential shortage of clinical ventilators and other medical equipment. 

Similarly, OYO offered to convert some of its hotels into a quarantine zone for patients advised to stay under quarantine or tested positive for coronavirus, last year. OYO, Treebo and Ginger Hotels have participated in numerous initiatives. 

A number of startups are also helping health authorities meet the gap in the supply of critical medical devices and equipment. In March last year, Ola offered 500 cars to the Karnataka government for several government projects. Bengaluru-based Ethereal Machines is 3D printing ventilator splitters uniquely designed for managing two patients with different ventilatory needs via differential pressure splitting. Another Bengaluru-based healthtech startup Dozee converts normal beds into mini ICU bed by offering artificial intelligence (AI) enabled sensor sheets.