India’s CSR spending has reached record levels, but funds are unevenly distributed and often driven by compliance rather than real community needs. The result is a gap between corporate intent and actual on-ground impact.
Introduction
A few months ago, I was at a district health centre in a small town in Rajasthan. The walls were peeling, the stock of medicines was two weeks old, and the single nurse on duty was managing over forty patients alone. Outside, a large hoarding announced that a well-known pharmaceutical company had “committed to community health” through its CSR programme. The nearest project under that programme, I later found out, was in Pune.
That image stayed with me. It captures something that statistics alone cannot: the gap between where India’s corporate social responsibility money is announced and where the need for it actually lives.
India is the only country in the world where CSR is a legal mandate. Under Section 135 of the Companies Act, 2013, companies meeting thresholds of ₹500 crore net worth, ₹1,000 crore turnover, or ₹5 crore net profit must spend at least 2% of their average net profit over the preceding three years on defined social activities. The intent was transformative. Eleven years on, the question is whether the execution has matched it.
The Numbers Look Good. So Far.
On paper, corporate India performed well in FY 2023–24. Indian companies collectively spent a record ₹34,909 crore on CSR. A 13% rise from the previous year, according to Fulcrum’s Bharat CSR Performance Report. The number of CSR projects grew from 44,425 in FY 2022 to 51,966 in FY 2023. Approximately 49% of eligible listed companies exceeded their mandated 2% spending threshold (Bharat CSR Performance Report, n.d.).
These are not small numbers. They represent real spending on real programmes. Education received the largest share at ₹10,085 crore, followed by healthcare, rural development, and sustainability (Eligibility, Laws, and Trends –, n.d.). Private companies contributed 84% of total funds. Central Public Sector Enterprises saw a 19% increase, reaching ₹4,911 crore in FY 2024 (CSR Spending by CPSEs Surge 19% to Rs 4,911 Cr, Reaches 4-Year High in FY24 | News – Business Standard, n.d.).
So the headline story is positive. But headline stories have fine print.
The Geography of Generosity
CSR money, it turns out, follows corporate presence and not community need. Maharashtra received approximately ₹5,500 crore in CSR funds in FY 2023–24, the highest of any state (Maharashtra Gets Maximum among 10 States Receiving 60% of Total CSR Spend by India Inc in FY24: Top CSR Initiatives – The CSR Journal, n.d.). Meanwhile, states with deeper development deficits such as Bihar, Jharkhand, Mizoram received a fraction of that. Mizoram’s Chief Minister Lalduhoma publicly noted in late 2025 that the state consistently receives one of the lowest shares of CSR funds in the country, attributing it partly to a limited number of registered implementing agencies in the state (Mizoram Receives One of Lowest Shares of CSR Funds in India: CM Lalduhoma | India News – Business Standard, n.d.).
This is not coincidental. Companies tend to spend in states where they operate, near their plants and headquarters. That logic makes project management easier and PR visibility higher. It also means that aspirational districts in eastern and northeastern India, remain systematically underfunded through CSR.
A Business Standard analysis captured this plainly. There is a stark divergence between where CSR needs exist and where their funds actually go. There is a strong indication suggesting that strategies are often driven by corporate motives, rather than by need mapping.
A Record Number. A Narrowing Circle
There is a second structural problem. CSR spending in India is heavily concentrated among a small number of large conglomerates. Tata Group, Reliance Industries, HDFC, ICICI Bank, Infosys, Wipro, these names appear repeatedly at the top of CSR rankings. ICICI Bank alone allocated ₹801 crore in FY 2024-25. This concentration is not inherently wrong. But it means that the national CSR ecosystem leans on a handful of institutional actors rather than building distributed, community responsibility across mid-size and small companies.
The 2025 amendment to the Companies (CSR Policy) Rules, which came into effect on 14 July 2025, attempts to address some of this. The Ministry of Corporate Affairs introduced a new web-based CSR-1 registration process, replacing the older PDF-based system. It tightened eligibility criteria for implementing agencies and reinforced reporting obligations (Companies (CSR Policy) Amendment Rules, 2025, n.d.). These are meaningful steps. But they address process. They do not yet address purpose.
What Gets Funded and Why?
When you look at what CSR money actually buys, a pattern emerges. Education consistently draws the highest share, not because Indian companies are particularly moved by schoolchildren. It is because education projects are easy to fund, photograph, and close within a financial year. Mobile classrooms, digital labs, and scholarship programmes generate good annual report copy. They also require relatively low technical expertise to implement.
Environmental projects, by contrast, received around 10% of total CSR funds in FY 2023–24. This, in a country where industrial pollution continues to compromise both air quality and groundwater in hundreds of districts. Outcome measurement for environmental restoration is complex. Results take years. Audit trails are harder to construct. And so the money goes elsewhere.
Accountability: The Missing Clause
India now has a framework for CSR spending. It does not yet have an equally robust framework for CSR outcomes. Companies file Form CSR-2 annually with the Ministry of Corporate Affairs, disclosing what was spent, on which projects, and in which geographies. What they do not routinely disclose, is what those projects actually achieved.
How many children stayed in school after the digital lab was installed? How many women who underwent health screenings accessed follow-up care? Did the watershed project in drought-prone Maharashtra improve crop yields for the farmers who depended on it? These questions are not currently mandatory. And so they mostly go unasked.
The MCA’s 2025 reforms push toward greater transparency. But independent third-party audits of CSR outcomes remain rare. Without them, a company can spend its 2% compliantly, file correctly, and generate no meaningful social return whatsoever. Compliance and impact remain two separate things.
What Should Change
Three things matter most going forward.
- First, the geographic rebalancing. Need-based allocation criteria should be built into CSR planning frameworks. Companies working primarily in affluent states should be encouraged to direct a portion of funds toward high-deficit districts.
- Outcome mandates annual CSR filings should include standardised impact indicators, not merely financial disclosures. This does not require new legislation. It requires MCA to publish and enforce a common reporting template.
- Independent verification. Third-party audits of CSR outcomes should become mandatory for companies spending above a defined threshold. Presently, companies with unspent funds face penalties of up to ₹10 million. Companies with spent-but-ineffective funds face nothing.
Conclusion
India’s CSR law was written with genuine ambition. Corporate India has, by and large, written the cheques it was asked to write. The failure is not in the intent. It is in the assumption that spending equals impact, that compliance equals accountability, and that proximity to a corporate campus equals community need.
The ₹34,909 crore spent in FY 2023–24 could do enormous good. Some of it is. But the nurse in Rajasthan, managing forty patients in an underfunded clinic forty kilometres from the nearest CSR-funded hospital, deserves more than a hoarding on the highway.
Corporate India must move from being a compliance-first system to becoming an impact-first one. That shift will not come from companies alone. It will require regulators who measure results, civil society that demands accountability, and citizens who understand that the 2% mandate is only the beginning of the story.
Clear Cut CSR Desk
New Delhi, UPDATED: April 20, 2026 05:30 IST
Written By: Tanmay J Urs
