Evaluating The Effectiveness Of CSR Spending Mandates In India
- IJLLR Journal
- Dec 20, 2025
- 2 min read
Amal Soorya P K, LLM, School of Law, Christ (Deemed to be University), Bangalore
ABSTRACT
This paper discusses about the mandatory Corporate Social Responsibility (CSR) in India which has been developed in the Companies Act, 2013 in Section 135. The provision provided in the act, which the qualified firms to contribute minimum 2% of their net profits(average) to social developmental projects, has radically changed CSR as a voluntary measure to a mandatory provision in the law.In the past ten years, this requirement has had great success in terms of raising corporate contributions, as well as entrenching of CSR in formal governance systems. Nonetheless, a critical analysis of the empirical studies and the policy appraisals indicate that increased expenditure on CSR has not yet led to more profound or sustainable developmental impacts. In its place, CSR behaviour is mostly compliance- based whereby it tends to focus more on visibility, convenience, and proximity to business activity rather than genuine needs of the community. The additional discussion creates an awareness of structural constraints that do not allow the transformative potential of the mandate. These are the geographic and sectoral imbalances in expenditure, poor monitoring and evaluation mechanisms, poor independent impact evaluation, poor enforcement of non-compliance and capacities of the implementing agencies like NGOs. This has seen the majority of CSR activities being short term, fragmented and not sustainable or owned by the community. Such lack of linkage between the intent of the law and its practical application creates significant questions on whether the mandatory CSR has served the intended purpose of ensuring inclusiveness and equity in development. To improve the framework, the study recommends changes that involve: more regulatory measures, uniformity of impact-assessment tools, incentives that are instituted to adopt CSR investment in under-served locations and institutional to facilitate capacity building. It is also necessary to make CSR more aligned with national development priorities and Sustainable Development Goals (SDGs) to achieve a long-term and measurable change. Finally, the paper concludes by saying that the effectiveness of the CSR regime in India cannot be measured by the number of money paid, but rather by the levels, quality and sustainability of the generated impact.
Keywords: Corporate Social Responsibility, Section 135, Companies Act 2013, impact assessment, governance, monitoring and evaluation, regional disparity, policy reform, sustainability.
