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

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

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

This is not a cherry-picked pair. Combine the government's own CSR portal disclosures with NITI Aayog's Multidimensional Poverty Index and the pattern is systemic: 61 per cent of India's multidimensionally poor live in seven states — Bihar, Uttar Pradesh, Madhya Pradesh, Jharkhand, Tripura, Meghalaya, Nagaland — that together receive barely 11 per cent of state-attributable CSR. 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 roughly 70 per cent of CSR funds bypass 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." Written as an accountability clause, it now functions as a legal instruction to spend where factories already are — which is to say, in the states that need it least. Eleven years of portal data show the skew widening, not correcting. Money follows infrastructure; capacity grows where money lands; next year's spend justifies itself. The loop closes with the poorest districts outside it.

Three more numbers complete the picture. Over ₹8,100 crore a year — 22.7 per cent of all CSR — is reported simply as "Pan India," untraceable to any state, let alone district: more than the bottom 25 states and UTs combined. The public portal cannot reconcile its own reports — its FY25 files disagree with each other by some ₹35,000 crore. And nowhere in eleven years of mandated disclosure is there a single outcome field. We know the rupees out. We do not know what they changed.

There is, briefly, a lever. The Corporate Laws (Amendment) Bill, 2026 — the first legislative opening on Section 135 since 2021 — sits with a Joint Parliamentary Committee. As drafted, it does one thing to CSR: raises the net-profit trigger from ₹5 crore to ₹10 crore, releasing thousands of smaller companies from the mandate. Threshold arithmetic, while the geography burns.

The Committee could do three better things.

First, fix the vector. Qualify the local-area preference for large companies and phase in a floor — say a quarter of CSR obligation — for Aspirational Districts and Blocks, the North-East, and Himalayan and island states. The May 2026 notification allowing CSR to flow through Social Stock Exchange-listed non-profits, including zero-coupon zero-principal instruments, means companies no longer need their own field presence to spend well in Kishanganj or Dhalai. The pipe exists; the Bill can point it.

Second, fix the trace. District-coded reporting in the CSR-2 form costs companies nothing — the data already sits in their implementing agencies' systems. Add a standard outcome block per Schedule VII head, aligned with the assurance discipline SEBI already applies to the top-150 listed companies under BRSR Core. And make the National CSR Portal publish reports that reconcile.

Third, keep the base broad. Relief for smaller companies should come as simpler compliance — board-report disclosure, pooled and SSE-routed spending — not exit. Small-company CSR is disproportionately local and rural, exactly the flows the system lacks.

The stakes compound. At current growth, CSR crosses ₹1 lakh crore a year by the mid-2030s. Between now and 2047 — the horizon the government itself has named — cumulative CSR will approach ₹15 lakh crore. Whether that sum is a genuine instrument of Viksit Bharat or a subsidy to the development of already-developed states is being decided, quietly, in a committee room this session. A Viksit Bharat in which Gurgaon's gleam is CSR-funded while 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 first in the world to mandate corporate social spending. The mandate created the volume. The next amendment must create the vector — 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.