Dr. Sanjay Bhardwaj is the Associate Partner for Social Sector Advisory, Government Infrastructure and Development Sector Advisory Services, Forvis Mazars, India.
Corporates often remain focused on compliance rather than driving purpose-driven impact. However, the scenario can be changed by aligning CSR with business acumen, leveraging technology, and valuing transparency. And that will deliver enduring impact.
India’s corporate social responsibility regime, formalised through Section 135 of the Companies Act (2013), mandates eligible companies to allocate 2 per cent of their net profits to social causes. Yet, despite this regulatory milestone, a significant proportion of CSR projects in India struggle to generate sustained impact, as highlighted by recent reports on implementation challenges and monitoring gaps. This is largely because CSR strategies often remain tethered to compliance, rather than evolving into authentic, purpose-driven initiatives that align with environmental, social, and governance (ESG) principles.
What are Corporates Doing? The Fundamental Challenges
The mandatory 2 per cent spending rule, though pivotal in mobilising resources, has unintentionally bred a culture of checkbox compliance. Many firms focus on ticking regulatory boxes over crafting meaningful interventions. A common example is the funding of school infrastructure projects without any mechanisms to track enrolment, attendance, or learning outcomes, often leaving the infrastructure underutilised and disconnected from the communities they aim to serve.
Another fundamental issue is the lack of genuine stakeholder engagement. While large organisations have adopted participatory approaches in their rural interventions, most companies limit their engagement to perfunctory consultations. This has fuelled resistance, especially in sectors like renewable energy, where communities feel excluded from decision-making. Although the National Guidelines on Responsible Business Conduct (NGRBC) encourage inclusive stakeholder practices, only 34 per cent of Indian firms involve NGOs or grassroots institutions in the design of their CSR projects, leaving a vast opportunity for improvement.
To enhance corporate social responsibility (CSR), companies should not only focus on strategic alignment but also prioritise employee well-being and mental health. Encouraging active employee participation in strategy development can make a significant difference. Initiatives such as employee volunteering and giving programmes can strengthen internal culture, boost engagement, and improve retention. Additionally, co-creating CSR initiatives with employees promotes innovation and ensures that these initiatives align with both individual values and corporate goals. Co-creating CSR initiatives with employees promotes innovation and ensures that these initiatives align with both individual values and corporate goals.
Despite CSR spending reaching ₹29,986 Crores in FY 2023–24, more than half of the projects still lack outcome-based frameworks. Education receives the largest chunk (₹10,085 Crores), yet literacy indicators in many targeted areas remain stagnant. Some companies offer a contrasting approach by aligning CSR with core competencies, measuring parameters such as employment outcomes in skilling initiatives and patient recovery rates in healthcare, thereby moving the needle towards measurable impact. This points to a broader issue of strategic misalignment. While organisations working in the IT/ITeS space utilise their IT heritage to support digital literacy, many others indulge in generic philanthropy that bears little relation to their business strengths. NGRBC’s Principle 2 specifically calls for CSR to be embedded in sustainable business models. Another conglomerate in India implements a circular economy coalition and weaves waste reduction into its supply chain, illustrating how companies can integrate CSR meaningfully into their operations.
To enhance corporate social responsibility (CSR), companies should not only focus on strategic alignment but also prioritise employee well-being and mental health. Encouraging active employee participation in strategy development can make a significant difference. Initiatives such as employee volunteering and giving programmes can strengthen internal culture, boost engagement, and improve retention. Additionally, co-creating CSR initiatives with employees promotes innovation and ensures that these initiatives align with both individual values and corporate goals. Co-creating CSR initiatives with employees promotes innovation and ensures that these initiatives align with both individual values and corporate goals.
Moreover, transparency remains a significant concern. Only about 30 per cent of Indian companies subject their CSR reports to third-party audits, despite the introduction of Form CSR-2 in 2021 aimed at standardising disclosures. In contrast, some large corporations publish detailed annual sustainability reports, covering carbon footprint reductions and programme outcomes, setting a benchmark in fostering trust through disclosure.
Short-termism is yet another barrier to impact. Many companies prefer quarterly health camps or ad-hoc donation drives rather than long-term programmes. In comparison, a few leading organisations have a long-term CSR plan, achieving sustained output along with a long-term commitment to communities. India’s CSR landscape could greatly benefit from similar multi-year strategies, particularly in sectors such as clean energy and climate resilience.
What Can Be Done?
Technological integration is falling behind global trends. Several leading examples could serve as a blueprint for success for others. For instance, Reliance Foundation’s blockchain-based agricultural grant tracking system and Infosys’s AI-powered water management systems highlight promising innovations. However, such advancements are still uncommon. On a positive note, the 2022 CSR Amendment Rules now explicitly permit technology-led interventions, indicating a shift in policy toward scalable and efficient delivery models.
For Indian firms seeking to transform their CSR outcomes, a four-pronged approach can serve as a robust framework:
- Undertaking a materiality assessment can help align CSR with both core business strengths and national development priorities, for example, tech firms supporting digital literacy initiatives under Digital India.
2. Co-creating interventions with NGOs, as seen in Tata Group’s collaboration with Smile Foundation for rural education, fosters community ownership.
3. Deploying technologies such as IoT for real-time monitoring or blockchain for fund traceability ensures greater accountability.
4. Reporting should shift from financial inputs to impact-linked outcomes, ideally through globally recognised frameworks like the Global Reporting Initiative (GRI).
Exciting opportunities are emerging in various sectors. For instance, Mahindra Group is making strides in the circular economy, Microsoft has partnered with Indian conservation NGOs through its AI for Earth initiative, and SEBI is promoting ESG-aligned Business Responsibility and Sustainability Reporting (BRSR). These developments suggest a significant shift in focus. Companies that integrate Corporate Social Responsibility (CSR) into their sustainability agendas are likely to gain a competitive advantage while also fulfilling regulatory requirements.
Many corporate social responsibility (CSR) projects could be more effective if companies involved local government bodies, such as Panchayats or town councils, from the start. These local groups have a deep understanding of their communities and can identify what is truly needed. However, in many cases, they are not included in the planning process. For example, in a health programme, it is much more beneficial to design the initiative with input from local health workers who are familiar with the issues faced by the community.
Water scarcity remains a critical challenge in rural India, often leading to migration, poor agricultural productivity, and health issues. In Anantapur, one of India’s driest districts, Coca-Cola India’s Anandana Foundation, in partnership with the SM Sehgal Foundation, launched Project Jaldhara. By constructing five check dams, the initiative replenished groundwater, revived agriculture, and enabled farmers to cultivate multiple crops annually, transforming previously barren fields into productive farmlands. Similarly, in Sikar, Rajasthan, Anandana’s water conservation projects rejuvenated over a billion litres of water, directly benefiting thousands. Women, who once walked miles for water, now have time for education and economic activities, highlighting how targeted CSR efforts can reduce drudgery, improve health, and foster economic resilience in rural communities.
India’s heavy reliance on agriculture, coupled with limited alternative livelihood options, often results in income instability and migration. Tata Trusts’ Open Source Fisheries (OSF) initiative addresses this by training rural fishing communities in improved aquaculture techniques, positively impacting over 35,000 households and reducing distress migration. Similarly, Reliance Foundation’s Bharat India Jodo (BIJ) project, implemented by SARDA, focuses on supporting small and marginal farmers in Mandla, Madhya Pradesh. The programme promotes sustainable agriculture, helps farmers diversify crops, and facilitates access to markets, thereby increasing income and reducing dependence on single-crop farming.
These examples underscore how CSR initiatives, when strategically aligned with local needs, can deliver tangible improvements, addressing some of India’s most pressing challenges.
Many corporate social responsibility (CSR) projects could be more effective if companies involved local government bodies, such as Panchayats or town councils, from the start. These local groups have a deep understanding of their communities and can identify what is truly needed. However, in many cases, they are not included in the planning process.
For example, in a health programme, it is much more beneficial to design the initiative with input from local health workers who are familiar with the issues faced by the community. When CSR efforts align with existing government schemes, such as the Jal Jeevan Mission or rural job programs, they can reach a larger audience without having to start from scratch. This collaboration also helps prevent duplication of efforts that are already being implemented.
In some areas, local officials can assist in mobilising volunteers, land, or infrastructure, which can enhance the delivery of CSR initiatives at no additional cost.
Some companies have attempted to establish a central hub for testing new ideas and disseminating them to nearby areas, with support from local groups. This model can continue even after the company moves on. And new ideas, such as social stock exchanges, may make it easier for local NGOs to acquire funds and produce results. Local trust, built over time, is hard to buy; and when companies treat local leaders as real partners, not just beneficiaries, the results are deeper and longer-lasting.
Strong leadership is key when CEOs champion CSR, not just in speeches but in boardrooms, the whole organisation responds. Lastly, companies must be open to feedback from beneficiaries, partners, and employees and use it to evolve their initiatives. This continuous improvement mindset will help CSR stay relevant, responsive, and truly impactful.
India’s CSR movement stands at a crossroads. The path from regulatory obligation to strategic value creation requires companies to evolve from mere funders to co-creators of sustainable change. A few leading organisations are already demonstrating that when CSR aligns with business acumen, leverages technology, and values transparency, it delivers enduring impact. To make real progress, Indian companies need to stop viewing CSR as an external function and instead see it as central to their identity. This means creating cross-functional teams that include CSR experts, business strategists, and frontline staff who understand ground realities. It also involves making CSR data-driven by tracking not just how money is spent but how lives are changed.
Strong leadership is key when CEOs champion CSR, not just in speeches but in boardrooms, the whole organisation responds. Lastly, companies must be open to feedback from beneficiaries, partners, and employees and use it to evolve their initiatives. This continuous improvement mindset will help CSR stay relevant, responsive, and truly impactful. With ESG becoming institutionalised, firms embracing the NGRBC principles will not only fulfil mandates but also strengthen brand equity and long-term resilience. The time is ripe for Indian CSR to transition from illusion to innovation, transforming corporate intent into meaningful nation-building.