What Happened
- A new report by CRISIL (released March 27, 2026, marking a decade of mandatory CSR) found that 46% of India's total Corporate Social Responsibility (CSR) expenditure is concentrated in Maharashtra, with six states capturing the lion's share of national CSR funds.
- Despite being the primary targets of CSR investment under policy intent, the 112 aspirational districts (formerly backward districts) receive only 2–4% of total national CSR funds.
- Only about 397 of the 2,020 companies eligible to make CSR investments chose to implement projects in aspirational districts in FY24 — roughly 20% of the eligible universe.
- The geographic skew mirrors the concentration of large corporate headquarters: Maharashtra hosts Reliance, Tata, HDFC, Mahindra, and numerous other major conglomerates whose profit base determines their CSR obligation.
- The report recommends targeted policy nudges — including mandatory disclosure of aspirational district spend as a separate CSR reporting line, and possible preferential scheduling for projects in underfunded districts — to redirect corporate philanthropy.
Static Topic Bridges
Section 135 of the Companies Act, 2013: India's Mandatory CSR Framework
India is the only country in the world to have legally mandated CSR spending through statute. Section 135 of the Companies Act, 2013, effective from April 1, 2014, requires companies meeting any of three thresholds to constitute a CSR Committee and spend at least 2% of their average net profit over the preceding three financial years on CSR activities.
- Eligibility thresholds (any one): Net worth ≥ ₹500 crore; OR Turnover ≥ ₹1,000 crore; OR Net profit ≥ ₹5 crore in the immediately preceding financial year.
- CSR Committee: minimum 3 directors including at least 1 independent director (for listed companies); recommends CSR Policy and oversees spending.
- Unspent CSR amount: 2021 amendment mandates transfer of unspent ongoing project funds to a designated Project Escrow Account within 30 days of FY-end; remaining unspent funds transferred to PM CARES, PMRF, or Schedule VII funds within 6 months of FY-end. Failure attracts penalty.
- Schedule VII: lists permissible CSR activities — eradication of hunger, malnutrition, poverty; education; gender equality; environmental sustainability; national heritage; rural development; sports; disaster relief; etc.
- Companies cannot count intra-group contributions or government-mandated statutory contributions (PF, ESI) as CSR spend.
Connection to this news: The 46% Maharashtra concentration arises because Section 135's 2% mandate is calculated on national profit — companies headquartered in financial centres naturally spend CSR where they have visibility and easy project management, not where development need is highest.
Aspirational Districts Programme: Targeting India's Most Deprived Areas
The Aspirational Districts Programme (ADP), launched in January 2018 and initially called the "Transformation of Aspirational Districts" programme, identifies 112 districts across 28 states where development indicators on health, nutrition, education, agriculture/water, financial inclusion, and basic infrastructure are weakest. The programme uses a competitive ranking mechanism (Delta Ranking) to incentivise state governments and district administrations to improve monthly on key indicators.
- 112 districts selected based on composite under-development index; concentrated in Jharkhand, Chhattisgarh, Bihar, Odisha, Madhya Pradesh, Uttar Pradesh, Rajasthan, and the Northeast.
- Delta Ranking: monthly improvement in indicators is scored; districts compete with peers; best performers highlighted — NITI Aayog monitors.
- Key indicator domains: Health & Nutrition (30%), Education (30%), Agriculture & Water Resources (20%), Financial Inclusion & Skill Development (10%), Basic Infrastructure (10%).
- The programme was extended and re-branded in 2022 as the Aspirational Blocks Programme (ABP) to cover 500 backward blocks within already-improved aspirational districts.
- Maharashtra has 8 aspirational districts (mostly in Vidarbha and Marathwada), but they receive far less CSR support than the state's industrial heartland.
Connection to this news: The report's finding that aspirational districts receive only 2–4% of CSR funds despite being the programme's stated priority is a governance paradox: the private sector's voluntary philanthropy systematically bypasses the areas most in need of supplementary investment.
Geographic Concentration of Corporate Activity and Development Asymmetry
India's corporate sector is concentrated in a handful of industrial states — Maharashtra, Karnataka, Tamil Nadu, Gujarat, Delhi NCR — which host large listed companies and generate the bulk of taxable corporate profits. Because Section 135 ties CSR obligation to profit (not to geography of impact), the natural flow of CSR follows corporate headquarters, local vendor communities, and areas where companies seek reputational proximity.
- Six states (Maharashtra, Karnataka, Tamil Nadu, Gujarat, Delhi, Andhra Pradesh) account for approximately 70% of total CSR spending nationally.
- Maharashtra's ₹5,375 crore in CSR (FY24) is 11 times the combined CSR inflow of all seven Northeast states.
- A 2021 SEBI mandate required listed entities to disclose CSR in Annual Reports with project-wise geographic breakdowns — data shows urban/peri-urban concentration.
- CSR by sector: education, healthcare, and rural development together account for roughly 60% of Schedule VII spending.
- PMGSY, PM-KISAN, and flagship government schemes already operate in aspirational districts — CSR could complement by funding innovation, last-mile delivery, and infrastructure gaps, but this requires intentional routing.
Connection to this news: The geographic mismatch is structurally predictable under Section 135's profit-based formula, raising the policy question of whether incentive structures (tax benefits for aspirational district CSR, mandatory disclosure as a separate head) can rebalance the flow.
CSR Effectiveness and Reform Debates
The decade of mandatory CSR (2014–2024) has seen total CSR spending cross ₹2.5 lakh crore cumulatively. However, research shows that CSR is most effective when aligned with company core competencies and when projects are multi-year with accountability mechanisms. The 2021 Companies Act amendment addressed non-spending (penalty provisions) but not geographic skew. Ongoing reform debates include: (1) should aspirational district spend be a mandatory sub-quota; (2) should CSR be delinked from profit to allow consistent contribution even in loss years; (3) should the government create a CSR marketplace to match corporate funds with certified grassroots organisations in underserved areas.
- National CSR Data Portal (MCA21): tracks company-wise CSR spending, project details; publicly accessible.
- Companies (CSR Policy) Rules, 2014 (amended 2021): operational rules for Section 135 implementation.
- Impact assessment: companies with ≥ ₹10 crore CSR obligation for 3+ years must commission impact assessments for projects with ≥ ₹1 crore spend.
- CSR vs philanthropy: mandatory CSR has moved beyond "cheque-book charity" toward multi-year programmatic interventions, but project selection remains corporate-driven without community voice.
Connection to this news: The CRISIL report's finding is a decade-assessment that validates the critique that mandatory CSR without geographic targeting reproduces rather than corrects India's regional development inequalities.
Key Facts & Data
- Section 135, Companies Act 2013: 2% of average net profit over 3 years on CSR; applicable to companies meeting any one of three thresholds.
- Schedule VII: lists permissible CSR activities (hunger, education, environment, heritage, rural development, etc.).
- CSR mandatory since April 1, 2014; India is the only country with statutory mandatory CSR.
- Maharashtra: ~46% of total national CSR spend; ₹5,375 crore in FY24.
- Aspirational districts (112 districts): receive only 2–4% of national CSR funds.
- Aspirational Districts Programme: launched January 2018; NITI Aayog monitoring; Delta Ranking system.
- Aspirational Blocks Programme (ABP): launched 2022; covers 500 backward blocks.
- Total cumulative CSR spending (2014–2024): over ₹2.5 lakh crore.
- 2021 amendment: unspent CSR funds must go to escrow or Schedule VII funds; penalties for non-compliance.