CSR Spending in India: Where the Money Goes After a Decade

The Lift Line

“Where companies are located can become a stronger determinant of CSR deployment than where India’s development deficits are greatest.” (Purvi Mehta, The Indian Express)

Why This Editorial Matters for Your Exam

This column in The Indian Express, “Where is the money going? Unpacking a decade of India’s private sector-led development”, published on 13 October 2026, is by Purvi Mehta. The paper describes the writer as “a senior technology advisor”. A decade after India made Corporate Social Responsibility (CSR) spending mandatory, she asks what the money is achieving, and where it is going.

The topic is a Mains staple: CSR sits where inclusive growth, government policy and corporate governance meet. Our earlier roundup item on the International Day of Charity set out the law, Section 135 included; this piece covers the spending pattern and the case for reform.

GS Paper 3: inclusive growth and issues arising from it. GS Paper 2: government policies and interventions for development. GS Paper 4: corporate governance and the link between profit and purpose.

In the news: in a column published on 13 October 2026, Purvi Mehta argues that India’s CSR pool, Rs 40,794 crore in 2024-25 by the count of a private consultancy’s report, follows where companies are located more than where development deficits are greatest, and proposes three reforms for the next decade of CSR.

Background and Context

Key terms first

Get the numbers right

The official series

For background, the MCA gave Parliament its own totals in reply to Lok Sabha Unstarred Question 2501, answered on 4 August 2025, with data “upto 31.03.2025”:

The private figure for 2024-25 is about 16.9 per cent above the official 2023-24 total, close to the 17 per cent rise the report gives, so the two series line up for that year.

Where the money went: four States

The two columns come from different sources, so do not read the rise from 37 to 47 per cent as a measured trend. The point that survives either way: four States take well over a third of all CSR money.

Where the money went: sectors

The private report’s sector split for 2024-25: education Rs 13,877 crore (34 per cent), healthcare Rs 8,531 crore (21 per cent), environmental sustainability Rs 3,397 crore (8 per cent), livelihood Rs 2,548 crore (6 per cent) and rural development Rs 2,477 crore (6 per cent). The MCA’s own sector table in the same Lok Sabha answer gives a similar order for 2023-24: education Rs 12,134.57 crore, health care Rs 7,150.81 crore, then environmental sustainability Rs 2,429.97 crore, rural development projects Rs 2,408.09 crore and livelihood enhancement projects Rs 2,360.09 crore.

The Analysis

1. From compliance to capital. The author writes: “India Inc. deserves credit. This is no longer charity at the margins of corporate balance sheets. It is a significant source of crucial development capital.” She calls the result “perhaps” the world’s largest example of mandatory private-sector contribution; the hedge is hers, and the claim is unsourced. Her real question is the next one: “The success of the CSR experiment in mobilising money must now evolve to maximising impact across the country and sectors.”

2. Money follows headquarters. The author’s sharpest point is geographic: where companies are located can decide where CSR goes more than where India’s development deficits are greatest. Her four-State figure overshoots (the four add up to Rs 19,328 crore, not more than Rs 20,000 crore), but the official data for 2023-24 show the same pattern: Maharashtra, Gujarat, Karnataka and Delhi took about 37 per cent of all CSR spending. Districts with little industry draw little CSR.

3. Not poor spending, but scattered spending. “The issue is not that CSR money is being poorly spent; much of it is extremely valuable in supporting education, health, and livelihoods. The larger question is what the thousands of individual projects are adding up to.” The sector data support the first half: education and health alone take more than half of the money in the private count.

4. Reform one: measure change, not cheques. “The accountability framework that currently measures the amount spent will have to be combined with stronger outcome indicators and standardisation of what they measure.” Note what already exists: the rules require impact assessment of large projects by companies with big CSR obligations, and allow part of the CSR budget to pay for it. The author’s call goes further, to standard outcome indicators that make projects comparable.

5. Reform two: pool the money. Thousands of projects “provide enormous innovation and effort”, but “fragmented, often repetitive activities must turn into longer-term, strategic interventions”. She writes: “The CSR law already permits companies to collaborate.” The CSR Rules, for instance, let a company act through an entity “established by the company, either singly or along with any other company”. Her illustration: ten companies spending Rs 10 crore each on unrelated projects may each produce useful outputs, but “Ten such companies coming together investing Rs 100 crore against a common results framework can potentially change a district system and have a much larger impact.”

6. Reform three: lend skills, not just money. “CSR is likely to create greater impact when companies deploy not just their money, but also their knowledge, networks and managerial capabilities.” Her example: an agriculture or food company “may be better placed to support farmer productivity, value chains or climate-resilient agriculture than to fund an unrelated education programme”.

7. A supplement, not a substitute. The headline, she writes, is what CSR capital “could achieve to move national indicators”, “not as a substitute for public expenditure, but as a supplement to it”. She ends on the ethics of it: “profit and purpose reinforce each other” in creating value for the country and for the companies themselves.

8. What to add in an answer. Two points the column does not make. First, data: the official series cited in Parliament runs to 2023-24, and the 2024-25 figures in circulation come from a private report, so better and timelier official data would make the author’s reforms easier to monitor. Second, the district lens: if CSR follows headquarters, the State and district administrations of low-industry regions need to present fundable, outcome-linked projects that companies can pool behind.

Data and Institutions Vault

Prelims-grade facts:

• Section 135, Companies Act, 2013: CSR is mandatory for a company that meets any one threshold in the immediately preceding financial year.
• The three thresholds: net worth of Rs 500 crore or more, turnover of Rs 1,000 crore or more, or net profit of Rs 5 crore or more.
• How much: at least 2 per cent of the average net profits of the three immediately preceding financial years.
• In force: Section 135 took effect on 1 April 2014.
• Unspent CSR Account: money unspent on an ongoing project goes to the account within 30 days of the end of the financial year.
• Unspent CSR Account, deadline: the money must be spent within three financial years, failing which it goes to a fund specified in Schedule VII.
• Companies (CSR Policy) Amendment Rules, 2022: notified on 20 September 2022.
• Official CSR spending: Rs 34,908.75 crore in 2023-24 (MCA, Lok Sabha answer).
• Top sectors (MCA, 2023-24): education (Rs 12,134.57 crore) and health care (Rs 7,150.81 crore).

⚠️ Watch the trap: CSR is 2 per cent of the average net profits of the three preceding years, not of a single year’s net profit. The Act is the Companies Act, 2013; Section 135 took effect in 2014. Rs 40,794 crore for 2024-25 comes from a private report, not from the MCA. By the column’s own figures, the four leading States received Rs 19,328 crore, not “more than Rs 20,000 crore”. The “world’s largest” label is the author’s hedged claim, not an established fact.

The Debate

How to Think About This

Ask three questions of any CSR rupee, one for each reform. Where does it go? (geography and need.) What does it change? (outcomes, not outlays.) Who is best placed to spend it? (pooling and core competence.) A strong Mains answer runs through all three, with one official number in each part.

For GS Paper 4, read the closing line as an ethics argument: CSR works best when a company sees purpose as part of its long-term interest, not as a compliance cost. In an interview, be ready to say how a district administration could make itself a better partner for CSR funds.

Diagram-in-Words

Takeaway Box

• The argument: CSR has become “a significant source of crucial development capital”; the next step is impact, not more money.
• The numbers: Rs 40,794 crore in 2024-25 by a private count; Rs 34,908.75 crore in 2023-24 by the MCA’s official count.
• The problem: money follows where companies are; by the column’s figures four States got Rs 19,328 crore, about 47 per cent.
• The three reforms: outcome indicators; pooled funds around themes and geographies; CSR aligned with core competence.
• The frame: CSR capital should work “not as a substitute for public expenditure, but as a supplement to it”.

Revision Flowchart

Sources: The Indian Express, Purvi Mehta, “Where is the money going? Unpacking a decade of India’s private sector-led development”; Ministry of Corporate Affairs, reply to Lok Sabha Unstarred Question 2501; India CSR, report on Fulcrum’s CSR Performance Report 2026; KPMG, First Notes on the Companies (CSR Policy) Amendment Rules, 2022.

Source: CSR Spending in India: Where the Money Goes After a Decade — Ujiyari.com | Free UPSC & State PCS Editorial Analysis