CSR Implementation: Assessments and Expenditures

Corporate Social Responsibility (CSR) in India is governed by Section 135 of the Companies Act, 2013, along with Schedule VII and Companies (CSR Policy) Rules, 2014. It mandates companies meeting certain financial criteria to allocate at least 2% of their average net profits from the previous three years towards CSR activities. These activities must align with the eligible categories listed in Schedule VII. CSR is a board-driven process, requiring the board to plan, execute, and monitor activities based on recommendations from the CSR Committee, while also ensuring proper utilization of funds. Compliance is monitored through statutory audits, and unspent CSR amounts are disclosed under the Companies (Auditor’s Report) Order, 2020 (CARO, 2020).

Since the scheme’s inception in 2014-15, sector-wise CSR expenditures have spanned diverse areas, including education, healthcare, rural development, and environmental sustainability. For instance, education and healthcare consistently dominate spending, with ₹10,085.78 crore and ₹6,830.60 crore allocated in FY 2022-23, respectively. State-wise CSR data for FY 2020-21 to FY 2022-23 highlights regional development trends, though detailed rural area-specific data is unavailable. Overall, the framework aims to ensure transparency and accountability while fostering socio-economic development across India.

GOVERNMENT OF INDIA
MINISTRY OF CORPORATE AFFAIRS

LOK SABHA
UNSTARRED QUESTION NO. 1091

Monday, February 10, 2025/Magha 21, 1946 (Saka)
Assessment of Companies under CSR

QUESTION

1091. Shri Balwant Baswant Wankhade:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

(a) whether the Government has made any assessment of public and private sector companies who have fulfilled their responsibility under Corporate Social Responsibility (CSR) and if so, the details along with the outcome thereof and if not, the reasons therefor;

(b) whether it is mandatory for all the public and private sector companies to spend at least 2 per cent of their average net profit for activities under CSR and if so, the sector-wise details since the inception of the scheme till date; and

(c) the State/UT-wise details of development work carried out/proposed to be carried out in rural areas of the country by companies under CSR during each of the last three years and the current year?

ANSWER

MINISTER OF STATE IN THE MINISTRY OF CORPORATE AFFAIRS AND MINISTER OF STATE IN THE MINISTRY OF ROAD TRANSPORT AND HIGHWAYS

[SHRI HARSH MALHOTRA]

(a): The legal framework for Corporate Social Responsibility (CSR) has been provided under Section 135 of the Companies Act, 2013 (‘Act’), Schedule VII of the Act and Companies (CSR Policy) Rules, 2014. Schedule VII of the Act indicates the eligible list of activities that can be undertaken by the companies under CSR. CSR is a Board driven process and the Board of the company plans, decides, executes and monitors the CSR activities of the company based on the recommendation of its CSR Committee. The CSR framework is disclosure based and the Board of the company is required to disclose the CSR Policy implemented by the company in its Board report and the Board of the company has to satisfy itself that the funds so disbursed have been utilised for the purposes and in the manner as approved by it.

Expenditure on CSR activities is required to be audited by the statutory auditors of the company. The Ministry has notified the Companies (Auditor’s Report) Order, 2020, (“CARO, 2020”) applicable from FY 2021-22 which requires auditors to state details of any unspent CSR amount. Thus, through the above framework, it is ensured that the provisions of the Acts and Rules are implemented.

(b): Section 135 of the Act mandates every company having net worth of Rs. 500 crore or more, or turnover of Rs. 1000 crore or more, or net profit of Rs. 5 crore or more during the immediately preceding financial year, to spend at least two percent of the average net profits of the company made over immediately preceding three financial years towards CSR as per the CSR Policy of the Company.

Further, the details of development sector-wise CSR expenditure since inception of the CSR scheme i.e since 2014-15 onwards till date are attached at Annexure-I.

(c) The details of development work carried out in rural areas is not separately maintained. However, the rural development projects have been captured under Development sector-wise CSR expenditure which can be seen at Annexure-I. Furthermore, State-wise CSR expenditure for last three financial years i.e. 2020-21, 2021-22, 2022-23 is attached at Annexure-II.

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Annexure-I

ANNEXURE REFERRED TO IN REPLY OF LOK SABHA UNSTARRED QUESTION NO. 1091 FOR 10.02.2025

(Data upto 31.03.2024) (Source : Corporate Data Management Cell)

*Companies either did not specify the names of sectors or indicated more than one sector where projects were undertaken.

Annexure-II

ANNEXURE REFERRED TO IN REPLY OF LOK SABHA UNSTARRED QUESTION NO. 1091 FOR 10.02.2025

(Data upto 31.03.2024) (Source : Corporate Data Management Cell)

*Companies either did not specify the names of sectors or indicated more than one sector where projects were undertaken.