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  • ThinkCap Advisors Team

Impact and Benefits of CSR On Indian Corporates

Updated: Oct 3, 2023

India proudly stands on the Global platform to have mandated Corporate Social Responsibility, following an amendment to the Companies Act in 2014.

The implementation and execution of a well-thought-out CSR project can benefit companies not only in terms of compliance but also in developing their most intangible asset: their brand value and reputation. Other benefits include

  • Improved employee connect and engagement

  • Improved customer loyalty

  • Credible international image

  • Greater societal impact

However, to ensure that the CSR project adopted is a success, the company should tie the project with its overall mission and vision. The thematic areas selected (such as Education, healthcare, WASH, etc.) should connect and align with its overall social objective. Also, CSR initiatives should have a long-term implementation vision, with local communities involved. Only then a project can be successful.

Key Requirements of CSR Regulations

  • Companies meeting the threshold under Section 135 of the Companies Act, 2013 are required to form a CSR committee, prepare a CSR policy and action plan.

  • Disclose the composition of CSR Committee, CSR policy and approved projects on company’s website and in the Board’s report

  • Spend the required amount on prescribed thematic areas, such as education, poverty, gender equality, healthcare etc

  • Set up a monitoring and evaluation framework to monitor its CSR projects with reference to approved timelines and year wise fund allocation. Specify the reasons for not spending the amount in the Board’s report, if the company fails to spend such amount

  • Transfer the unspent amount, if any, to a separate bank account in case of ongoing project or to specified funds (in other cases) as mentioned in CSR regulations within the prescribed time limit

  • Disclose annual report on CSR in the Board’s report

  • The company shall be liable to a penalty if it fails to transfer the unspent amount as prescribed in the regulations


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