Lok Sabha Question No. 3843 (UNSTARRED), answered on 2026-03-16
Subject: Utilisation of Corporate Social Responsibility (CSR) Funds
Ministry: CORPORATE AFFAIRS
Asked by: Ms Sayani Ghosh

## GOVERNMENT OF INDIA MINISTRY OF CORPORATE AFFAIRS

## LOK SABHA UNSTARRED QUESTION NO. 3843 ANSWERED ON TUESDAY, MARCH 16, 2026

UTILISATION OF CORPORATE SOCIAL RESPONSIBILITY (CSR) FUNDS

## QUESTION

3843:  Ms Sayani Ghosh:

Will the Minister of Corporate Affairs be pleased to state:

- (a) whether the Government is aware that a disproportionate share of CSR funds is being spent in relatively low-poverty districts, rather than in districts with the highest development deficits, if so, the details thereof;
- (b)  whether it is a fact that only 3 out of 54 identified high-poverty districts figure among the  top recipients of CSR expenditure, if so, the details thereof;
- (c)  whether  there  has  been  an  assessment  of  the  regional  and  socio-economic imbalance in CSR fund allocation and its implications for inclusive development, if so, the details thereof;
- (d)  whether  numerous  companies  underspend  or  barely  meet  the  minimum  CSR obligation during the last five years and if so, the number of such companies;
- (e) whether it is a fact that nearly 60 per cent of large companies route CSR spending through  their  own  in-house  foundations,  rather  than  independent  NGOs  or  local organisations, if so, the details thereof; and
- (f)  whether such preference for in-house foundations has raised concerns regarding transparency, independence, impact assessment and genuine outreach and if so, the details thereof?

## 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) to (c): As per the provisions of the Companies Act, 2013, 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.  The Government does not issue any specific direction to the companies to spend in any particular area/activity.
- (d): As per section 135(7) of the Act, the company shall be liable to a penalty of twice the  amount  required  to  be  transferred  by  the  company  to  the  Fund  specified  in Schedule VII or the Unspent Corporate Social Responsibility Account, as the case may be, or one crore rupees, whichever is less, and every officer of the company who is in default shall be liable to a penalty of one-tenth of the amount required to be transferred by the company to such Fund specified in Schedule VII, or the Unspent Corporate Social Responsibility Account, as the case may be, or two lakh rupees, whichever is

less. Whenever any violation of CSR provisions is reported, action against such noncompliant Companies is initiated as per provisions of the Companies Act, 2013 and rules made thereunder after due examination of records and following due process of law.

(e):  Section  135  of  the  Companies  Act ,  2013  ('the  Act') read  with  Rule  4(1)  of  the Companies  (CSR  Policy)  Rules,  2014  provides  that  the  company  is  empowered  to undertake its CSR activities either by the company itself or through-

- i. a company established under section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via)  of  clause  (23C)  of  section  10  or  registered  under  section  12A  and approved under 80 G of the Income Tax Act, 1961 (43 of 1961), established by the company, either singly or along with any other company; or
- ii. a company established under section 8 of the Act or a registered trust or a registered society, established by  the  Central  Government  or  State Government; or
- iii. any entity established under an Act of Parliament or a State legislature; or
- iv. a company established under section 8 of the Act, or a registered public trust or a registered society, exempted under sub-clauses (iv), (v), (vi) or (via)  of  clause  (23C)  of  section  10  or  registered  under  section  12A  and approved under 80 G of the Income Tax Act, 1961, and having an established track record of at least three years in undertaking similar activities.

As  per  information  filed  by  the  companies,  3120  companies/entities  have  been established under category (i) above.

(f): The CSR framework is disclosure based and CSR mandated companies are required to  file  details  of  CSR  activities  annually  in  the  MCA21  registry.  The  Board  of  the company is required to disclose the CSR Policy implemented by the company in its Board  report.  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.  Rule  8  of  the  Companies  (CSR  Policy)  Rules,  2014  contains provisions related to impact assessment of CSR projects that every company having average CSR obligation of 10 crore rupees or more in pursuance of sub-section (5) of section  135  of  the  Act,  in  the  three  immediately  preceding  financial  years,  shall undertake impact assessment, through an independent agency, of their CSR projects having outlays of one crore rupees or more, and which have been completed not less than  one  year  before  undertaking  the  impact  study.  The  details  of  CSR  activities, Impact Assessment etc. are required to be reported by all the companies in the 'Annual Report on CSR' including annual action plan on CSR which is part of the Company's Board Report.

The existing legal provisions provide adequate mechanisms to ensure transparency and accountability.

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