The High-Level Committee on Corporate Social Responsibility (CSR), chaired by Injeti Srinivas, Secretary, Corporate Affairs, was established on September 28, 2018, by the Ministry of Corporate Affairs. Members included Anoop Kumar Mittal (CMD, NBCC); N. Chandrasekaran (Chairman, Tata Sons); Amit Chandra (MD, Bain Capital Private Equity); P. S. Narasimha (Additional Solicitor General); Rajiv K. Luthra (Founder and Managing Director, Luthra & Luthra Law Offices); Shobana Kamineni (Executive Vice Chairperson, Apollo Hospitals Enterprise Limited); Anil K. Gupta (Founder, Honey Bee Network & Professor, IIM-A); Narinder Dhruv Batra (President, Indian Olympic Association); S. Santhanakrishnan (CA & Consultant); Mathew Cherian (CEO, Helpage India); Director General (Indian Institute of Corporate Affairs); and Chairman (SEBI). The committee was tasked with reviewing the existing CSR framework under the Companies Act of 2013 and recommending a comprehensive policy roadmap. The committee adopted a consultative approach, engaging with various stakeholders, holding public consultations, and analyzing CSR data reported by companies. The committee’s goal was to align CSR activities with national priorities, UN Sustainable Development Goals, and emerging themes such as social enterprises and business and human rights. The review process involved examining past reports, global literature, and best practices to address challenges and improve the CSR framework.

The committee’s findings indicated significant trends and challenges in CSR implementation from FY 2014/15 to 2017/18. CSR expenditure increased by 44 percent from 2014/15 to 2015/16 but showed a slight decline in subsequent years. Compliance with CSR expenditure requirements varied, with rates of 59 percent in 2014/15, 85 percent in 2015/16, 72 percent in 2016/17, and 57 percent in 2017/18. Key challenges included difficulties in the identification of suitable projects and implementing agencies, multiyear projects where contributions and success would be difficult to assess, and a lack of expertise. The report highlighted that while public sector undertakings spent more on CSR on average compared to private companies, significant contributions were also made by private companies exempt from certain regulatory requirements. Major CSR spending areas included education, healthcare, rural development, and environmental sustainability.

The committee made several key recommendations to enhance and refine CSR practices. These included expanding CSR applicability to banks and limited liability partnerships, clarifying CSR obligations for newly incorporated companies, and exempting smaller companies from the requirement to form a separate CSR committee. It also proposed transferring unspent CSR funds to a designated account, with provisions for spending these funds within three to five years or transferring them to a government-specified fund for high-impact projects. The recommendations emphasized aligning the Constitution’s Schedule VII (which lists areas eligible for CSR activities) with the Sustainable Development Goals, mandating impact assessments for large CSR expenditures, and improving CSR reporting and audits. Additionally, the committee suggested developing a CSR exchange portal (a digital platform to connect companies with CSR projects and implementing agencies), creating a category for social-impact companies, extending business-responsibility reporting to the top 1,000 companies, and advocating individual social responsibility. These measures aimed to strengthen the CSR framework, improve transparency and accountability, and enhance the overall impact of CSR activities.

Based on the recommendations of the committee, several key policy changes were made to the CSR framework. These include extending CSR applicability to banks and limited liability partnerships, exempting smaller companies from forming CSR committees, and mandating the transfer of unspent CSR funds to designated accounts. Schedule VII was aligned with Sustainable Development Goals, impact assessments were required for large CSR expenditures, and CSR reporting was enhanced. Implementing agencies must now register with the Ministry of Corporate Affairs, and CSR expenditures became tax deductible. However, proposals for a CSR exchange portal, social-impact companies, and regulatory oversight for capital assets were not adopted.

The report addressed gaps in CSR implementation, including inconsistent compliance, challenges in project identification, and insufficient accountability. It recommended expanding CSR applicability, mandating impact assessments for large expenditures, aligning CSR activities with Sustainable Development Goals, and improving transparency through enhanced reporting and audits.