"A Decade of India's Mandatory Corporate Social Responsibility Spending"
CSR (Corporate Social Responsibility)
mandatory corporate spending on social development under the Companies Act, 2013
Section 135, Companies Act 2013
legal provision mandating CSR spending by qualifying companies
India's Corporate Social Responsibility (CSR) law comes from Section 135 of the Companies Act, 2013. It became effective in 2014. It applies to companies that cross any one of three thresholds. These thresholds are: net worth of Rs 500 crore, turnover of Rs 1,000 crore, or net profit of Rs 5 crore. Such companies must spend at least 2% of their average net profit of the preceding three years on CSR activities. These activities are listed in Schedule VII of the Act. They include education, health, livelihoods, environment, and more. This made India the first country to legally mandate CSR spending at this scale. It turned what was once voluntary charity into a structured compliance requirement.
The CSR rules also draw a careful boundary around what counts. They specifically exclude activities that benefit the company directly or its own employees from being counted as CSR. This means the money genuinely reaches outside beneficiaries. It does not substitute for routine business or staff-welfare spending. This distinction matters because it keeps CSR separate from ordinary employee benefits. It also keeps it separate from in-house projects a company might otherwise want to label as social spending. Over the decade, this framework has mobilised a large, steady pool of private development capital. This capital runs into lakhs of crores of rupees. It is built on a law that fixes both a floor (the 2% rule) and a boundary (the exclusion) for what counts.
CSR works as a hybrid of compliance and discretion. The law fixes how much must be spent and broadly on what themes. But companies retain freedom to choose specific projects, partners, and geographies. This explains why CSR spending in India has produced tens of thousands of individual projects. These projects are across education, health, skilling, and livelihoods. They are run by companies, their foundations, or implementing NGOs. The National CSR Portal and mandatory disclosure in annual reports provide the main accountability mechanism. Companies must report the amount spent. But they do not always report the outcomes achieved. …
With reference to Corporate Social Responsibility (CSR) rules in India, consider the following statements:
1.CSR rules specify that expenditures that benefit the company directly or its employees will not be considered as CSR activities.
2.CSR rules do not specify minimum spending on CSR activities.
Which of the statements given above is/are correct?
With reference to Corporate Social Responsibility (CSR) provisions under the Companies Act, 2013, consider the following statements:
1.A company becomes liable for CSR if it crosses any one of the specified net worth, turnover, or net profit thresholds.
2.The mandated CSR spend is 2% of a company's net profit for the current financial year alone.
3.Expenditure that benefits the company's own employees does not qualify as CSR spending.
How many of the above statements are correct?
Which one of the following correctly matches a CSR applicability threshold under the Companies Act, 2013, with its specified value?
Consider the following pairs regarding India's Corporate Social Responsibility (CSR) framework:
1.Legal basis — Section 135, Companies Act 2013
2.List of eligible activities — Schedule VII
3.Minimum mandated spend — 5% of average net profit
Which of the pairs given above is/are correctly matched?
Under India's CSR rules, which of the following would NOT qualify as valid CSR expenditure?
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