Lok Sabha Question No. 3899 (UNSTARRED), answered on 2026-03-16
Subject: Penalties for misuse of CSR Funds
Ministry: CORPORATE AFFAIRS
Asked by: Smt. Sajda Ahmed

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS LOK SABHA

## UNSTARRED QUESTION NO. 3899

## ANSWERED ON MONDAY, MARCH 16, 2026/PHALGUNA 25, 1947 (SAKA)

## PENALTIES FOR MISUSE OF CSR FUNDS QUESTION

3899. Smt. Sajda Ahmed:

Will the Minister of CORPORATE AFFAIRS be pleased to state:

- (a) whether the Government is aware of PSUs using CSR funds for activities that are less significant than the larger public good, if so, the details thereof;
- (b)  whether  CSR  funds  allocated  by  PSUs  are  being  effectively  used  for  promoting elementary education and rural livelihood, if so, the details thereof;
- (c) whether any audit or review has been conducted on the use of these funds, if so, the details of findings thereof;
- (d) whether the Government has any plans to strengthen regulations and impose penalties for misuse of CSR funds, if so, the details thereof;
- (e) whether Members of Parliament (MPs) are allowed to recommend schemes or projects for CSR funding by PSUs, if so, the details and extent of such provisions; and
- (f) the steps being taken by the Government to ensure that CSR funds support impactful initiatives?

## 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): Under the Companies Act, 2013 ('Act'), CSR is a Board driven process and the Board of the company is empowered to plan, decide, execute and monitor CSR activities of the company based on the recommendation of its CSR Committee. This Committee formulates and recommends the CSR policy, which outlines the activities to be undertaken by the company  in  alignment  with  the  areas  or  subjects  specified  in  Schedule  VII.  The Government does not issue any directions to Corporates to spend in any particular area or activity.

(b):  There is no provision of allocation of CSR funds in CSR legal framework.  However, On the basis of annual filings, filed by the companies in MCA21 registry the development sector-wise details of CSR expenditure incurred by the Public Sector Undertakings (PSUs) in  India  for  the  last  three  financial  years  (FYs)  i.e.  2021-22  to  2023-24  is  attached  at Annexure

(c) & (d):  As per the provisions of the Companies Act, 2013, 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, and the Chief Financial Officer or the person responsible for financial management shall certify to the effect.

The CSR framework is disclosure based and 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. Whenever violation of CSR provisions is reported, action against such non-compliant Companies and officersin-default  is  taken  as  per  provisions  of  the  Act  after  due  examination  of  records  and following due process of law. (e): There is no such provision in the CSR legal framework.

(f): Schedule VII of the Act enumerates the activities that can be undertaken as CSR, which are aligned with national priorities to promote inclusive and sustainable development.

*****

## Refer to part (b) of Lok Sabha Unstarred Question no. 3899 for 16.03.2026 Development Sector-wise CSR expenditure by PSUs in India from FY 2021-22 to FY 2023-24

## (Amount in Rs. Crores)

| Sl.No   | Development Sector                             | FY 2021-22   | FY 2022-23   | FY 2023-24   |
|---------|------------------------------------------------|--------------|--------------|--------------|
| 1       | Agro forestry                                  | 3.47         | 0.65         | 0.70         |
| 2       | Animal welfare                                 | 3.16         | 2.96         | 20.05        |
| 3       | Armed Forces, Veterans, War Widows/ Dependants | 9.56         | 4.98         | 17.99        |
| 4       | Art and culture                                | 26.36        | 69.71        | 120.11       |
| 5       | Conservation of natural resources              | 10.18        | 21.19        | 24.82        |
| 6       | Education                                      | 825.93       | 669.72       | 884.13       |
| 7       | Environmental sustainability                   | 275.58       | 265.67       | 243.96       |
| 8       | Gender equality                                | 1.28         | 3.02         | 2.91         |
| 9       | Health care                                    | 1,386.65     | 1,527.74     | 1,494.16     |
| 10      | Livelihood enhancement projects                | 31.81        | 156.47       | 524.50       |
| 11      | Poverty, Eradicating Hunger, Malnutrition      | 119.69       | 23.92        | 63.94        |
| 12      | Rural development projects                     | 380.66       | 372.84       | 442.33       |
| 13      | Safe drinking water                            | 33.58        | 39.91        | 127.53       |
| 14      | Sanitation                                     | 142.77       | 226.41       | 105.13       |
| 15      | Senior Citizens Welfare                        | 7.32         | 5.40         | 3.26         |
| 16      | Setting up homes and hostels for women         | 1.71         | 6.10         | 5.20         |
| 17      | Setting up orphanage                           | 1.37         | 2.02         | 0.92         |
| 18      | Slum area development                          | 36.23        | 2.21         | 4.83         |
| 19      | Socio-economic equalities                      | 14.40        | 20.55        | 9.59         |
| 20      | Special education                              | 3.99         | 11.66        | 12.17        |
| 21      | Technology incubators                          | 0.61         | -            | -            |
| 22      | Training to promote sports                     | 56.91        | 102.50       | 129.16       |
| 23      | Vocational skills                              | 142.33       | 142.97       | 169.40       |
| 24      | Women empowerment                              | 22.21        | 29.89        | 43.90        |
| 25      | Other Central Government Funds                 | 869.43       | 403.58       | 319.98       |
| 26      | NEC/Not mentioned*                             | -            | -            | 2.52         |
|         | Total                                          | 4,407.17     | 4,112.08     | 4,773.17     |

(Data upto 31.03.2025) (Source: Corporate Data Management Cell)

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