The Ministry of Corporate Affairs (MCA)’s latest notification, issued in February 2024, marks a pivotal shift in India’s corporate social responsibility (CSR) landscape. This amendment to the Companies (Corporate Social Responsibility Policy) Rules, 2014 introduces a refined framework for CSR disclosures, compelling greater transparency and strategic alignment in corporate philanthropy.
The update mandates companies with an average CSR obligation of ₹10 crore or more in the preceding three financial years to undergo CSR impact assessments. These assessments must be conducted by independent agencies and the results publicly disclosed in the company’s annual report. The move is intended to ensure that CSR spending translates into measurable social outcomes, rather than being a compliance-driven exercise.
In addition, the revised rules redefine administrative overheads, capping them strictly at 5% of total CSR expenditure and excluding any expenditure on staff working exclusively for CSR projects. The amendment also requires unspent CSR funds, earmarked for ongoing projects, to be transferred to a separate CSR Unspent Account within 30 days from the end of the financial year, followed by utilization within three years.
This amendment has far-reaching implications. For companies, the focus now shifts from mere fund allocation to impact-oriented CSR strategies. By standardizing disclosures and making impact reports mandatory, the MCA aims to enhance public trust in corporate initiatives and ensure accountability in the deployment of funds. It also puts pressure on corporates to partner with credible implementing agencies and measure performance more rigorously.
On a broader scale, this signals a shift toward corporate citizenship grounded in measurable responsibility, rather than superficial branding exercises. The government’s approach reinforces the notion that CSR should be integrated into a company’s long-term vision and not be viewed as a peripheral activity.
This regulation reflects a maturing regulatory ecosystem that encourages ethical, transparent, and socially responsible corporate behaviour. As these changes come into effect, industry experts anticipate a positive transformation in how companies approach CSR—not as a mandate, but as a meaningful opportunity to generate sustainable community impact.
Reference:
https://www.indiafilings.com/
https://www.mca.gov.in/
news outlet: : https://economictimes.indiatimes.com/