Short Description:
India’s mandatory CSR spending has seen a steady five-year rise, exceeding ₹34,908 crore in FY24. Explore the financial trends and regulatory framework driving this growth.
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Main Article:
Corporate Social Responsibility (CSR) in India has evolved from a voluntary gesture to a strategic, mandated financial commitment with significant economic impact. Governed by Section 135 of the Companies Act, 2013, the law requires eligible companies to spend at least 2% of their average net profits from the preceding three years on areas listed in Schedule VII. This unique regulatory framework, overseen by the Board of Directors and monitored via the MCA21 portal, has created a transparent, accountable ecosystem for corporate philanthropy, transforming it into a major stream of social investment.
A financial analysis of the last five years reveals a compelling upward trajectory in CSR expenditure. Starting at ₹24,965 crore in FY 2019-20, spending consistently grew each year, even amidst global economic challenges. It climbed to ₹26,211 crore (FY 2020-21), ₹27,141 crore (FY 2021-22), and saw a more substantial jump to ₹30,932 crore in FY 2022-23. The trend peaked in FY 2023-24, with companies investing a record ₹34,908 crore into community and national development projects, underscoring the increasing scale and institutionalization of CSR in corporate India.
This growth is backed by stringent compliance mechanisms. Companies must form a CSR Committee, draft an annual action plan, and have spending certified by the CFO and audited by statutory auditors. For larger projects, Rule 8 mandates independent impact assessments for companies with an average obligation of ₹10 crore or more, ensuring funds create measurable social value. All disclosures are public on the csr.gov.in portal, promoting unparalleled transparency. This structured approach ensures that the rising financial outlay translates into targeted, impactful CSR activities across critical sectors like education, healthcare, and environment.
Short Summary:
India’s CSR landscape, driven by the Companies Act, 2013, has witnessed a steady five-year rise in expenditure, reaching ₹34,908 crore in FY24. Mandated spending of 2% of net profit, rigorous oversight by the Board of Directors, and transparent reporting via the MCA21 system ensure these significant funds are channeled into impactful social projects, reflecting a mature model of legislated corporate citizenship.
