Abstract 

India’s Corporate Social Responsibility (CSR) framework, introduced under Section 135 of the  Companies Act, 2013, marked a global precedent by transforming corporate philanthropy from  a voluntary gesture into a legal obligation. This legislation aimed to turn corporate benevolence  upon itself and make it a legally enforceable duty. By requiring qualifying companies to spend  a minimum of two per cent of their average net profits on socially positive activities, India  became the first major economy to codify corporate responsibility into its laws. This paper  undertakes a critical reappraisal of the effectiveness of this requirement, arguing that despite  having channelled significant monetary amounts to developmental areas, including education,  health, and rural development, its potential to bring about transformative change is stifled due  to compliance-oriented conduct, poor monitoring, and restricted evaluation of social impacts.  In the absence of such a mandate, most corporations would likely abstain from social  investment altogether, pointing out that voluntary giving, as a standalone, cannot assure  corporate accountability or long-term progress. 

The paper argues that CSR, despite being conceptually linked to sustainable development,  comes to be practised as a tool of image management and creation of goodwill. Lack of  standardised guidelines, ambiguity regarding eligible activities, and dominance of publicity seeking and short-term projects instead of the larger developmental objectives aimed to be  achieved by the law. Once again, variation of regional funds and shortage of effective  institutional monitoring further widens the gap between CSR outlays and measurable social  deliverables. This paper argues that India’s statutory system, despite being tainted by several  functional shortcomings, provides a necessary foundation to bring together profit-maximising ends and social fairness. To reinforce this foundation, it is necessary to enhance transparency,  conduct independent third-party audits, set out strict impact assessment procedures, and align CSR objectives with the United Nations’ Sustainable Development Goals (SDGs). 

This research finally establishes that India’s CSR legislation is not just a statutory obligation  but a developmental and ethical imperative. It needs a more effective, law-backed CSR  structure to make corporate influence positively impact equitable growth, environmental care,  and the long-term sustainable development path of the nation. 

Keywords: Corporate Social Responsibility, Companies Act 2013, Accountability, Sustainable  Development, Corporate Governance.

Introduction 

Corporate Social Responsibility (CSR) has been transformed to become not only a charitable  act but also a globally accepted tool of moral governance and viable development. It reflects  the same notion of corporations having an obligation to volunteer to society and the ecology in  which they conduct business, on giving back, in addition to the realisation of profits. India  made a pioneering move in codifying this moral obligation into a legal obligation by the  Companies Act, 2013, which created Section 135 – a provision that obligates qualifying  companies to devote at least two per cent of their average net profits towards socially beneficial  causes. This was a landmark development in corporate governance across the globe, with India  being the only nation to legally enforce CSR spending in the world. The motivation for this  piece of legislation innovation was to see corporate entities become active contributors in the  development of the country. The law was considered to be a direction of bringing together the  private capital and corporate skills in order to solve the urgent social needs like poverty,  illiteracy, inadequacies in health services and environmental degradation. Ideally, it was to  combine the efficiency of the economy and equity in the society, thus enhancing the nexus  between business development and sustainable development. CSR is in tandem with the United  Nations Sustainable Development Goals (SDGs) that focus on inclusive development,  environmental sustainability, and equal access to resources on the global level. The statutory  model of CSR in India thus forms a special case study to analyse how legal mandate could or  would affect corporate behaviour to attain long-term developmental goals. Nevertheless, the  Indian CSR system, ten years after its adoption, has shown various technical flaws within the  system that prevent its transformational potential. The empirical evidence and statistics of the  Ministry of Corporate Affairs suggest that most companies view CSR as a compliance project  and not a developmental strategy. It is usually concentrated on the visible, short-term projects  to improve corporate image, but not to produce tangible, measurable social results. In addition,  the absence of standardised guidelines, uncertainties as to the eligible activities and an  imbalance in the distribution of funds among different regions facilitate inefficiency and  unequal effects. The lack of any third-party checking and the poor systems of evaluating their  effects also complement the lack of accountability, as it is hard to ascertain whether CSR funds  really contribute toward sustainable development. In that regard, the redesign and execution of  the CSR framework in India becomes immediate. This study is aimed at measuring the  effectiveness of the legislative intent of Section 135 in its true application and the success of  CSR in its mode of balancing the profit motive and social responsibility. The paper also  explores the major issues that restrict the effectiveness of the framework, which include regulatory gaps and a lack of transparency due to poor institutional control. The approach of the study is doctrinal and analytical, which will be followed by the legislative review, case  studies, and secondary publication data, which will be taken into consideration as legislative,  CSR disclosures, and academic analysis. Through a critical argument of the evolution,  implementation, and performance of the CSR mandate in India, the study will seek to  recommend structural and policy changes that would help in improving its effectiveness. These  involve increased surveillance, external audit, and coordinating the CSR programs with UN  SDGs in order to guarantee benefits to society in the long term. Conclusively, this paper  believes that CSR in India needs to go beyond the compliance nature that it currently has and  grow into a sustainable and impact-oriented governance model. It should not be regarded as an  obligation in law alone but rather as an element of development and morality, an important tool  of balancing corporate power with the larger national objectives of inclusive development,  environmental protection, and social equity. 

Legal Mandate of CSR under the Companies Act, 2013 

Section 135 of the Companies Act, 2013, is a milestone moment in India’s corporate  governance history, marking a shift towards mandatory social responsibility from voluntary  corporate philanthropy. Before this legislative breakthrough, CSR in India was discretionary,  driven by moral business norms and philanthropy of industrial houses like Tata, Birla, and  Godrej. Nevertheless, with the liberalisation of the Indian economy and increasing public  consciousness of corporate influence and social inequalities, there was a strong case for  regulating corporate responsibility by legislative means.¹Codifying CSR, India became the  world’s first nation to make social contribution a statutory obligation of corporations, weaving  economic growth into ethical and sustainable development objectives. 

Section 135 of the Companies Act, 2013, read together with the Companies (Corporate Social  Responsibility Policy) Rules, 2014,² prescribes the structure of commitments, administration,  and accountability. It applies to all companies that, in the last financial year, have any of the  following financial criteria: 

(a) a net worth of ₹500 crore or more; or 

(b) a turnover of ₹1,000 crore or more; 

(c) a net profit of ₹5 crore or above. 

These qualifying companies are required to invest two per cent of the average net profits earned  in the three immediately preceding financial years on activities specified in Schedule VII of  the Act. They include eliminating hunger and poverty, advancing education, gender equality,  healthcare, environmental sustainability, rural development, and donations to technology  incubators and government relief funds. 

This legal framework seeks to provide for continuous, systematic, and measurable corporate  involvement in social development and not be ad hoc. It also constitutes a manifestation of the  effort to harmonise local legislation with global undertakings like the UN Global Compact  (2000) and the UN Sustainable Development Goals (2015) that seek responsible business  practices. 

Under Section 135(1), all eligible companies are required to have a Corporate Social  Responsibility Committee (CSR Committee) with a minimum of three directors, one of whom  must be an independent director. The CSR Committee is then responsible for developing and  submitting a CSR Policy to the Board of Directors, which indicates the proposed activities,  execution processes, and budgetary provisions. The Board itself makes the final decisions on  approval, disclosure, and implementation of this policy. 

The Companies (Amendment) Act, 2019, and the ensuing CSR Amendment Rules, 2021,  mandated a stricter compliance regime by making the unspent CSR fund transfer obligatory. Any amount not spent on an ongoing project has to be transferred to a standalone CSR account  within 30 days, and unspent funds not for ongoing projects have to be remitted to a government selected fund within six months of the closure of the financial year. These changes, along with  penal provisions, underscore that CSR is not an empty ritual but an enforceable statutory  corporate duty. 

Besides this, the 2021 amendments also authorise firms to conduct impact assessments on  projects worth over ₹1 crore and to hire third-party implementation agencies that are registered  with the MCA.³ This is a shift in the direction of performance-based CSR where qualitative  results take precedence over mere expenditure. 

The effectiveness of any regulatory system hinges on solid reporting and public accountability.  Rule 8 of the CSR Policy Rules, 2014, stipulates that firms must annex a thorough Annual CSR  Report to their Board’s Report, reporting on the implementation of projects, expenditure incurred, and grounds for not utilising funds. In addition, since 2022, firms are required to file  Form CSR-2, a digital yearly return reporting minute details on CSR projects, budgets,  implementation agencies, and their results.⁴ 

Public revelation through corporate websites and MCA filings allows regulators, civil society,  and shareholders to examine corporate conduct. Such increased transparency has raised higher  reputational incentives for real compliance and revealed shallow, image-based CSR practices. 

The Tata Group is a leader in statutory compliance with CSR. With initiatives like Tata Steel’s  “Thousand Schools Initiative” and Tata Power’s “Dhaaga” project for women’s livelihood, Tata  businesses have linked CSR initiatives with education, sustainability, and gender development.  Tata Group’s aggregate CSR spend in FY 2022–23 was more than ₹800 crore, encompassing  areas such as health, skill development, and climate resilience.⁵ 

Infosys Limited, with the Infosys Foundation, is a shining example of systematic CSR  execution. It spends on education, healthcare, and ecological initiatives, including hospitals  constructed and rural schools sponsored. In FY 2023, Infosys spent ₹370 crore under CSR with  100% utilisation of its mandatory expenditure.⁶ 

Reliance Industries Limited (RIL), through the Reliance Foundation, operates one of India’s  biggest private philanthropic networks. Its flagship initiatives, such as Bharat India Jodo,  Project Drishti, and Rural Transformation Initiatives, touched 6 million plus beneficiaries in  FY 2023. RIL has expended over ₹1,000 crore on CSR, strictly adhering to Section 135  guidelines.⁷ 

ITC Limited merges CSR with sustainability through projects such as e-Choupal, which  digitises farmers, and Mission Sunehra Kal, which encourages watershed management and  recycling of waste.⁸ Mahindra & Mahindra’s “Nanhi Kali Project” enrols more than 200,000  poor girls in school, while Hindustan Unilever’s “Project Shakti” empowers 160,000 rural  entrepreneurs, both of which are in line with the UN Sustainable Development Goals (SDGs).⁹ 

Some of the prominent examples include Wipro’s “Earthian Program” for environmental  literacy, health and education outreach by Adani Foundation in rural India, and coastal  ecosystem restoration investments made by ONGC. All these varied efforts reflect that mandatory CSR compliance has motivated Indian firms to combine ethical responsibility with  strategic sustainability. 

However, the statutory obligation under Section 135 lays a strong base to synthesise corporate  profits with national welfare. By imposing accountability, promoting transparency, and  harmonising business behaviour with international standards of sustainability, the Act has  institutionalised CSR as a cornerstone of corporate governance and social justice in India. 

CSR Spending and Sectoral Impact 

The enactment of Section 135 of the Companies Act, 2013, made CSR a mandatory  responsibility rather than a voluntary action, bringing about a tipping point in India’s  development strategy. In the last ten years, the regulation has guided substantial corporate  resources to social and environmental causes, restating the business community’s role in  domestic development. Cumulative CSR spending since its introduction in FY 2014–15 stands  at over ₹1.5 lakh crore, with over 25,000 firms engaging each year.¹⁰ 

Education and vocational development have always been allotted the highest proportion of  CSR expenditure, around 35–40% based on company initiatives to tackle illiteracy and  employability issues. ¹¹The Infosys Foundation, in programs like Spark-IT and the Aarohan  Social Innovation Awards, has promoted digital education and teacher training, thereby  enriching India’s human capital pool.¹² Healthcare comes a close second, with 25–30% of total  CSR expenditure, particularly post-COVID-19. The rural outreach of the Reliance Foundation  and maternal health initiatives of Wipro Cares have contributed heavily to healthcare delivery  in the underserved areas. ¹³Rural development and environmental sustainability, while critical  to inclusive growth, receive comparatively lesser shares of CSR allocations. Initiatives such as  Tata Power’s Act for Mahseer, with its biodiversity conservation, and ITC’s e-Choupal initiative  show how corporates are able to bring ecological responsibility together with rural livelihood  creation.¹⁴ Yet, CSR expenditure is still unevenly allocated across regions. More than one-third  of the aggregate CSR contributions are found in industrially developed states like Maharashtra,  Gujarat, and Karnataka, with central and north-eastern states receiving still less. This  geographical imbalance points to the imperative of more equalised and need-based CSR  planning. In spite of increased financial involvement, the relationship between CSR spending and  tangible social outcomes continues to be tenuous. A study by KPMG India discovered that less  than 20% of CSR initiatives involve qualitative impact assessments. While the Companies  (Amendment) Rules, 2021 brought in mandatory evaluation for projects over ₹1 crore and  spanning more than a year, implementation has been patchy, especially for small companies  that do not have technical expertise. In contrast, firms with standalone CSR foundations like  Tata Trusts, Infosys Foundation, and Reliance Foundation have received better sustainable  results because of organised monitoring and sustained involvement. 

The latest trend is alignment with the United Nations Sustainable Development Goals (SDGs).  The Aditya Birla Group’s CSR efforts align with SDG 3 (Good Health), SDG 4 (Quality  Education), and SDG 13 (Climate Action) and affect more than nine million beneficiaries every  year. HCL Foundation’s Samuday Project also combines education, water conservation, and  livelihood enhancement in 630 villages in Uttar Pradesh and provides a model for large-scale  rural development that can be replicated.¹⁵ 

India’s CSR experience is a testament to remarkable financial mobilisation and corporate  engagement, but success is not measured in terms of expenditure. Enhancing impact evaluation,  encouraging regional balance, and developing long-term, community-focused initiatives can  take CSR from a legal obligation to a catalyst for sustainable and inclusive development. 

Compliance-Oriented Practices vs. Impact-Oriented CSR 

The compulsive aspect of India’s CSR regime, brought in under Section 135 of the Companies  Act, 2013, was conceived to harmonise corporate involvement with national development. Yet,  it has also promoted a compliance-oriented culture where most businesses regard CSR as a  statutory responsibility, not a strategic one.¹⁶ Rather than concentrating on long-term  developmental results, some companies are more interested in meeting the statutory 2%  expenditure condition as quickly as possible, usually by spending out budgets close to the year end to minimise penalties or negative publicity. 

KPMG India (2022) conducted a survey that found that almost 60% of Indian companies  consider CSR to be mainly a regulatory obligation, leading to fragmented, short-term initiatives  with marginal community outreach. This “tick-the-box” strategy prefers conspicuous, low-risk  activities like one-day health camps or donation campaigns to changing, long-term initiatives.  The lack of standardised metrics for assessing programmes permits companies to conflate financial disbursal with social impact, making CSR a mere quantitative exercise rather than a  qualitative one.¹⁷ 

The movement towards shallow, image-driven CSR has also watered down its revolutionary  potential. Most firms are engaged in high-profile activities that attract favourable news but  yield no lasting dividends. The Centre for Monitoring Indian Economy (2021) stated that about  45% of CSR initiatives are short-term measures lacking community ownership and  maintenance provisions.¹⁸ In the period of the COVID-19 pandemic, most companies  concentrated on reactive relief like the distribution of oxygen cylinders, PPE kits, and food  packets, useful but with limited developmental effects in the long run. 

Although such efforts enhance the reputation of brands, they hardly tackle ingrained problems  in healthcare, education, or rural infrastructure. Some companies have even reclassified  existing philanthropic efforts under CSR for compliance purposes. The delegation of CSR  activities to third-party providers also dilutes accountability further, as independent checks and  feedback from communities are few and far between. Thus, while overall CSR expenditure has  grown over ₹1.5 lakh crore since 2014, impactful outcomes remain grossly disproportionate. 

On the other hand, some companies prove that CSR can advance beyond compliance into a  strategic development tool. The Tata Group, through Tata Trusts and the Tata Steel Foundation,  mainstreams CSR into its business culture. Flagship programs such as the 1000 Schools  Program and MANSI (Maternal and Newborn Survival Initiative) focus on capacity-building  and long-term community engagement.¹⁹ Likewise, the Infosys Foundation integrates  education and rural infrastructure projects in a vision of long-term development. Mission  Sunehra Kal of ITC Limited connects business sustainability with social value through  watershed management, sustainable farming, and reforestation over more than 15,000  villages.²⁰ 

A compliance culture is evident: companies meeting the statutory threshold must spend at least  2 % of their average net profit of three preceding years. The data for FY 2023-24 show 1,394  listed companies with an average three-year net profit of Rs. 9.62 lakh crore, obligated to spend  Rs. 18,309 crores, but actual spend was ₹17,967 crore, leaving a shortfall of roughly Rs. 342  crores.²¹ The first drawback is that the expenditure is undertaken simply because of regulatory obligation, not because of a deliberate strategy integrated into corporate governance and long term social value creation. 

A manifestation of this compliance culture is the prevalence of short-term, high‐visibility  projects that may garner publicity but lack sustained follow-through or rigorous outcome  measurement. Such initiatives align more with marketing exposure than deep social change.  MCA has noted that the large recipients of CSR funds are the states with a dense corporate  presence; the impact of these funds is not widely felt, and there is a need to enhance their  visibility and effectiveness.²² 

The future of CSR in India is to change perception from a statutory mandate to CSR as a column  of ethical capitalism and corporate governance. When coupled with transparency,  accountability, and responsible engagement, CSR becomes not just a matter of law but an agent  of national development and inclusivity. 

Ambiguity in Eligible Activities and Lack of Standardization 

The second major challenge in India’s CSR framework lies in the ambiguity of what constitutes  an eligible CSR activity, coupled with inconsistent standardisation across regions and sectors.  Section 135 and the consequent regulations refer to CSR activities according to the Board’s  policy and Schedule VII to the Act’s list. The definitions remain imprecise to a large extent and,  in most cases, still remain without operational detail, enabling very widely defined activities to  be referred to as CSR. 

As a result, companies can allocate CSR funds towards activities of zero social value or towards  programs that are loosely connected to approved but do not establish robust outcome  frameworks or systematized monitoring mechanisms. This imprecision is a threat that CSR will  come to be regarded as an accounting exercise and not a real social investment. The lack of  standardisation also plays out spatially and across sectors. Recent studies have documented  that CSR allocations tend to concentrate in certain states or districts, leaving large geographic  swathes underserved. One analysis found that 60 per cent of CSR funds go to the top six states,  leaving many less industrialised states with minimal CSR inflows.²³ 

State‐by‐state CSR expenditure figures show the unevenness of CSR expenditure. Major cities  like Delhi Rs 1,949.95 crore and Gujarat Rs 2,707.54 crore, during FY 2023-24, whereas the  majority of the small states/UTs such as Arunachal Pradesh had already spent merely Rs 39.57 crore and Andaman & Nicobar Island Rs 3.03 crore.²⁴ The Economic Survey for 2023-24  stated that eight north-eastern states had been allocated less than 1% of overall CSR  allocation.²⁵ The 2023-24 Economic Survey noted that eight north-eastern states received less  than 1 % of total CSR allocation. Skewed regional allocation is a sign of weak standardisation  in geographic and sectoral allocation of CSR, and a sign of how a failure to prioritise at the  sectoral or regional level enables companies to allocate funds based on convenience or  visibility rather than development priorities. 

Monitoring, Accountability, and Evaluation 

Successful CSR relies not merely on the funding and implementation of programmes, but on  the monitoring, accountability and evaluation structure surrounding them. India’s infrastructure  has good elements, as well as enduring gaps. 

The Companies (Corporate Social Responsibility Policy) Rules, 2014 mandate yearly  disclosures of CSR initiatives and oversight mechanisms by the board. Further, MCA has  introduced a level of formalised transparency by way of the introduction of the online filing  Form CSR-2 by companies to make CSR disclosures. Nonetheless, even with these formal  mechanisms of compliance, the evidence testifies that board involvement tends to be  superficial; the focus is more on compliance with statutory requirements than on meaningful  review of CSR performance. 

While routine financial audits are done, rigorous social impact assessments (SIAs) are yet to  be practiced uniformly. Mandatory impact assessment of CSR projects of sizable magnitude or  multi-year duration was brought in with the Companies (Corporate Social Responsibility  Policy) Amendment Rules, 2021.²⁶ While extensive public information is limited, bigger  companies have started applying audit-led CSR evaluation models incorporating third-party  validation, performance metrics and outcome measures. These practices represent the  possibility of a change in CSR ethos, but such models remain the exception and not the rule. 

Reliance Foundation (RF) has come up with a consolidated report of external impact  evaluations done on a set of its CSR activities, reflecting a systematic approach to monitoring  and evaluation. The report summarizes third-party measurement outcomes across water, health,  nutrition and livelihoods interventions and shows measurable outcomes at the community level  RF’s report stands out for gathering independent, project-level evaluations and reporting beneficiary-level outcome measures instead of inputs or outputs alone. This technique fortifies  the evidentiary foundation for impact claims and enables tracing of an intervention to  quantifiable changes in fetching time and household access to water. However, RF’s practice  shows how large corporates can go beyond financial compliance to outcomes-based evaluation  through independent evaluation.²⁷ 

CSR Alignment with Sustainable Development Goals (SDGs) 

To enable corporate social responsibility (CSR) efforts to go beyond philanthropy and be a part  of longer-term national development, the Sustainable Development Goals (SDGs) global  framework is an ideal normative base. In 2015, the official commitment of India to the 2030  Agenda allowed the country to pay even greater attention to organizing CSR activities in  accordance with the SDGs.²⁸ 

This coordination of CSR activities to enhance their impact on the SDGs is demonstrated by  the example of different corporate initiatives in India. An example is that many companies have  developed CSR programs to facilitate integration and equity in learning as far as SDG 4 of  quality education is concerned. By improving the quality and access to education, the Tata Steel  Foundation is a direct investment in SDG 4, when inclusive and equitable quality education is  attained through scholarship activities and digital literacy programs in the regions where  interventions are needed.²⁹ 

Lack of proper healthcare facilities particularly in the rural and remote places is among the  greatest challenges to the achievement of SDG 3 in India. Businesses can contribute to the  infrastructural enhancement of healthcare by building hospitals, clinics, and medical facilities,  especially in the regions where the access to treatment is limited. Such contributions can be in  the form of cash, medical supplies or medical staff. Also, corporate philanthropy can help  combat the shortage of healthcare personnel in the developing countries by financing the  education and training of healthcare professionals. This could lead to a work force that can give  high quality medical care.³⁰ 

Wipro, a multinational Indian company, has committed to giving INR 1,125 crore (estimated  as $150 million) to address the COVID-19 pandemic in India. The money will be spent on establishing COVID-19 hospitals, acquiring medical equipment and supplies, and stimulating  the creation of new treatments and vaccines.³¹ 

A case in point is the Aditya Birla Group, an Indian conglomerate that has launched the My  Wellness program in 2020 that is designed to support mental and physical health among the  employees. The program is made up of virtual wellness sessions, mental health counselling  services and mindfulness training. ³² 

The Reliance Foundation is a charity based agency in India and has formed the Reliance  Foundation Hospital in Mumbai that offers good services in healthcare at a lower price. The  hospital offers various services, among which are cancer services, cardiology, and also the  neurology among others.³³ 

Within a waste-management framework identified as SDG 13 (Climate Action,) in Vadodara,  a SHG there, thousands of kilograms of kitchen waste are processed every month and converted  to compost and revenue-generating opportunities to women, through aerobic bio-composting  activities, through purpose-built rotating drums, under a corporate social responsibility (CSR)  initiative, the women plant wet waste to produce organic compost.³⁴ 

Strategic CSR thus transcends compliance in expenditure, but aligns corporate innovation,  resources, and skills with the national priorities and Sustainable Development Goals (SDGs).  SDGs do coincide with the CSR agenda of India in Schedule VII of the Companies Act, 2013.  The SDGs directly relating to education, conservation of the environment, poverty reduction,  and Health 3 (Health), 4 (Education), 8 (Economic Growth), and 13 (Climate Action) are  closely connected to education and healthcare.³⁵ 

Recommendations and Future Directions 

To enhance the system of CSR in India, there is a need to transform current compliance oriented strategies to models where there is emphasis of quantified social performance,  transparency, and alignment with the national development agenda. 

To begin with, transparency should be improved and the system of independent audit should  be implemented. As an example, any CSR initiative exceeding a specified limit (e.g. 1 crore,  or taking over a year) will be required to fall under a standardized impact-assessment methodology by qualified independent auditors. The results should also be published on the  MCA portal to transparent database.³⁶ The necessity to present a separate CSR Outcome  Report and annual financial statements will enhance the degree of accountability to a set of  spending information to quantified social results, KPIs, and qualitative lessons learned. These  would transform the CSR not into an opaque philanthropy but into a transparent and data driven social investing. 

It is also important that more explicit guidelines and standard impact assessment frameworks  should be developed. Model frameworks would, consequently, benefit the CSR regulatory  system in India, based on the international standards of ISO 26000 and Global Reporting  Initiative (GRI) and the local socio-economic circumstances. These are supposed to describe  the qualified CSR activities in a clear manner on localisation, and the duration of the activity  and the sustainability criterion entailed. Moreover, the direct inclusion of the concept of CSR  in corporate strategy and governance can guarantee continuity of the long-term projects, and  objectivity associated with the essential business metrics and performance indicators.  Additional reform must be a motivator of sustainable CSR with a focus on outcomes. 

Rather than just enforced expenditure, the government may act as a positive incentive with  such things as tax breaks, national recognition awards or even a graded CSR rating of the  company who achieves considerable and verifiable results. Multi-year funding cycle would  also be encouraged, which would enable the corporatives to invest in system-wide solutions  such as capacity-building and institutional strengthening. Corporates, non-governmental  organisations and government bodies should be encouraged to collaborate to maximise  resources, decrease duplication and develop scalable and evidence-based social interventions. 

Lastly, CSR must be integrated into the framework of corporate governance and national  development policies that are ethical. The CSR committees must not only look at compliance  but also social return on investment, that is to say, the projects must be in line with the priorities  of the development of the India in terms of education, healthcare, livelihoods, and climate  resilience. Moving the CSR portfolios against the SDGs and national missions would help to  enhance coherence and avert resource fragmentation. Profitable geographical allocation of  CSR funds, particularly to aspirational districts and underdeveloped areas such as the North East, should be promoted so as to have an inclusive distribution and balanced national growth.  

Overall, by finding the CSR in corporate governance systems, reinforcing assessment systems,  and linking the work to the SDGs, India will be able to make the CSR a strategic tool of inclusive development, as well as sustainable national development instead of a simple  statutory requirement. 

Conclusion 

The mandatory provision for CSR under the Companies Act 2013 has shifted the corporate  social responsibility from mere philanthropic activity to a regulated obligation. The legal  mandate has fostered higher levels of corporate participation and spending on social initiatives.  Indian businesses has had a strong evolution of CSR from charity to strategic innovation.³⁷ There is a shortcoming due to limited independent audits and weak integration of impact  frameworks, and the framework has a constrained impact due to its focus on compliance rather  than measurable outcomes.³⁸ 

Besides, the correspondence between the CSR and the Sustainable Development Goals (SDGs)  offers an effective prospect of enhanced, pro-developmental corporate activities. Research has  found that CSR programmes that are well aligned to SDGs offer a better social and financial  impact. As an example, one of the latest papers reports a significant positive relationship  between CSR-SDG correspondence and firm performance in India. The problem however is  that most CSR activities still operate as one-off initiatives as opposed to outcome based and  integrated initiatives that are aligned with the priorities of national development and SDGs. 

Individuals in charge of implementing CSR area in India need to focus on impact-orientation  and not just expenditure in order to maximise efficacy of the CSR model. This involves  requiring the use of standard third-party impact assessments, incorporation of CSR in corporate  governance and corporate strategies as opposed to considering it as an auxiliary commitment,  and fair geographic and thematic distribution of CSR funds. These dimensions will enable the  CSR to transform as a mandatory burden to a competitive instrument to inclusive growth,  sustainable development and corporate legitimacy. Then only will India be able to use the  potential of CSR more fully in the development of not only business interests but also the  common social and ecological goals. 

¹Arora, B. and Puranik, R., “A Review of Corporate Social Responsibility in India,” Development, Vol. 47, No. 3  (2004). 

² Companies (Corporate Social Responsibility Policy) Rules, 2014, G.S.R. 129(E), Ministry of Corporate Affairs,  Government of India.

³ Ministry of Corporate Affairs, Notification on CSR Impact Assessment, 22 January 2021.

⁴ Ministry of Corporate Affairs, Form CSR-2 Filing Requirement Notification (2022). ⁵ Tata Group, Annual CSR Report 2022–23, available at https://www.tata.com. 

⁶Infosys Limited, Corporate Social Responsibility Report 2022–23, Infosys Foundation. ⁷ Reliance Industries Limited, Annual Report 2022–23, Reliance Foundation Section. 

⁸ITC Limited, Sustainability and CSR Report 2022–23, ITC CSR Portal. 

⁹ Mahindra Group, Project Nanhi Kali Annual Report 2023; Hindustan Unilever Limited, Project Shakti Overview,  HUL CSR Portal.

¹⁰ Ministry of Corporate Affairs, Government of India, National CSR Data Portal (2023). ¹¹ KPMG India, India’s CSR Reporting Survey: Trends and Analysis (2022). 

¹² Infosys Foundation. (2022). Annual Report 2021–22 

¹³ Reliance Foundation, Annual CSR Report (2022). 

¹⁴ Tata Power, Sustainability Report: Environmental Initiatives and Biodiversity Conservation (2022); ITC Ltd.,  Sustainability Report: e-Choupal and Rural Empowerment Initiatives (2021).

¹⁵ HCL Foundation, Samuday Project Annual Report (2023). 

¹⁶ Ministry of Corporate Affairs, Government of India, Companies Act, § 135 (2013).

¹⁷FICCI & United Nations Development Programme, Corporate Responsibility and Inclusive Development: India  Report (2020). 

¹⁸ Centre for Monitoring Indian Economy, CSR Implementation Gaps and Impact Challenges in India (2021). ¹⁹ Tata Steel Foundation, Annual Sustainability Report (2022). 

²⁰ ITC Ltd., Sustainability Report: Mission Sunehra Kal (2023). 

²¹The Economic Times, Apr 24, 2025, India Inc’s spending on CSR hit the fast lane in FY24

²² The Economic Times, Jul 02,2023, Impact of CSR funds ‘not widely felt’ despite jump in spending: Ministry  of Corporate Affairs 

    ²³ Deccan Herald, 08 August 2025, 60% of CSR funds go to top 6 states: New study points to unequal spending

²⁴ Ministry of Corporate Affairs, CSR State-Wise Spending Data, accessed via TaxGuru (2024) 

 ²⁵ The Economic Times, Jul 02, 2023, Impact of CSR funds ‘not widely felt’ despite jump in spending: Ministry  of Corporate Affairs 

²⁶ Announcement of Companies (CSR Policy) Amendment Rules, 2021 – (24-01-2021) ICAI/CSR/2020/1/7

²⁷ Reliance Industries Limited (2024), Summary of independent Impact Assessment studies conducted: CSR-AI 2023-24 

²⁸ KPMG India, Sustainable Development Goals (SDGs): Leveraging CSR to achieve SDGs, Dec 2017

²⁹ Tata Consultancy Services (2023), Corporate Sustainability Report 

³⁰ The CSR Journal, How Corporate Social Responsibility (CSR) can help in Achieving Sustainable Development  Goal (SDG) 3: Good Health and Well-being, 2023

³¹ Wipro ltd., Wipro Enterprises Ltd and Azim Premji Foundation, Press Release, April 1, 2020  ³² Aditya Birla Capital, Aditya Birla Wellness Pvt. Ltd.  

³³ Reliance Foundation Hospital, Reliance Foundation  

³⁴ The Times of India, Jul 22, 2025, Women’s self-help group converts wet waste to revenue 

 ³⁵ United Nations Development Programme (India), 2024

³⁶ Ministry of Coal, India, https://coal.nic.in/

³⁷ Parmar, K. & Sindhav, K. (2024). Corporate Social Responsibility in India: Evolution, Compliance, And Future  Directions, African Journal of Biomedical Research, Vol. 27(5s) (December 2024); 06 -13 Research Article  ³⁸ Dhawan, S, & Samantara, R. (2020). Corporate Social Responsibility in India: Issues and Challenges, IIMS  Journal of Management Science 11(2):91-103