India's CSR has a volume story — and a vector problem

India's corporate social responsibility system just had its best year: ₹40,794 crore in FY 2024-25, up 17%, the eleventh year of growth in a row since Section 135 made India the first country to make CSR compulsory. That is the volume story, and it is real.

Here is the vector problem — the direction the money travels. A poor person in Bihar draws ₹61 of CSR a year. A poor person in Goa draws ₹64,308. A thousand times more.

That is not one cherry-picked pair. Put the government's own CSR portal figures next to NITI Aayog's Multidimensional Poverty Index and the pattern runs through the whole dataset. Sixty-one per cent of India's multidimensionally poor live in seven states — Bihar, Uttar Pradesh, Madhya Pradesh, Jharkhand, Tripura, Meghalaya, Nagaland — and between them those states get barely 11 per cent of the CSR that can be traced to a state. Maharashtra alone takes 17.5 per cent. Bihar, home to a fifth of India's poor, gets 0.7 per cent. The eight North-Eastern states share 2 per cent. Independent analysis finds that roughly 70 per cent of CSR money never reaches the government's own Aspirational Districts.

The law did this, not the companies. Section 135(5) tells firms to "give preference to the local area... where it operates." It was written to keep companies accountable to the places they affect. In practice it now reads as an instruction to spend where the factories already are — which means the states that need it least. Eleven years of portal data show the gap widening, not closing. Money follows infrastructure. Capacity grows where the money lands. Next year's spending then justifies itself. The loop closes, and the poorest districts are outside it.

Three more numbers complete the picture. More than ₹8,100 crore a year — 22.7 per cent of all CSR — is reported simply as "Pan India," traceable to no state at all, let alone a district. That is more than the bottom 25 states and union territories put together. The public portal cannot even reconcile its own reports: its FY25 files disagree with each other by some ₹35,000 crore. And in eleven years of compulsory disclosure there is not one field for what the money achieved. We know what went out. We do not know what it changed.

There is, briefly, a lever. The Corporate Laws (Amendment) Bill, 2026 — the first chance to change Section 135 since 2021 — is with a Joint Parliamentary Committee. As drafted it does one thing to CSR: it lifts the profit level at which the rule kicks in from ₹5 crore to ₹10 crore, letting thousands of smaller companies out. Arithmetic about thresholds, while the geography burns.

The Committee could do three better things.

First, fix the direction. Soften the local-area preference for large companies, and phase in a floor — say a quarter of what a company owes — for Aspirational Districts and Blocks, the North-East, and the Himalayan and island states. Since the May 2026 notification, CSR money can flow through non-profits listed on the Social Stock Exchange, so a company no longer needs its own staff on the ground to spend well in Kishanganj or Dhalai. The pipe already exists. The Bill can point it.

Second, fix the trail. Adding a district code to the CSR-2 form costs companies nothing — their delivery partners already hold that data. Add a standard block for what each Schedule VII activity achieved, checked the same way SEBI already requires of the top 150 listed companies under BRSR Core. And make the National CSR Portal publish figures that add up.

Third, keep the base broad. Smaller companies should get relief by having less paperwork — a line in the board report, and spending pooled or routed through the Social Stock Exchange — not by being let out altogether. Small-company CSR is far more local and far more rural than the rest, which is exactly what the system is short of.

The stakes compound. At the current rate, CSR passes ₹1 lakh crore a year by the mid-2030s. Between now and 2047 — the date the government itself has named — the total will approach ₹15 lakh crore. Whether that money becomes a real instrument of Viksit Bharat, or a subsidy to states that are already developed, is being decided quietly in a committee room this session. A Viksit Bharat where Gurgaon's gleam is CSR-funded and Kishanganj's classrooms are not is not a developed nation. It is a divided one with better annual reports.

India was bold enough to be the first country in the world to make corporate social spending compulsory. The mandate created the volume. The next amendment has to create the direction — because 2047 arrives whether or not the money gets there first.

The author's full analysis — misallocation index, dashboard, and JPC submission — is built from CSR.gov.in disclosures (FY2014-15 to FY2024-25) and NITI Aayog's National MPI Progress Review 2023.