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Since 2014, any Indian company with a net worth of Rs 500 crore, a turnover of Rs 1,000 crore or a net profit of Rs 5 crore has had to spend at least 2% of its average profit of the previous three years on corporate social responsibility (CSR): schools, hospitals, sanitation, the environment and the other activities listed in Schedule VII of the Companies Act. The Corporate Laws (Amendment) Bill, 2026, introduced in the Lok Sabha on 23 March, would double the profit trigger to Rs 10 crore. A Joint Parliamentary Committee examined it and reported on 3 August, backing the higher threshold with changes. The Bill has not yet been passed.

The change sounds large, and by one measure it is: the corporate affairs ministry told the committee that 11,204 companies would leave the CSR regime. By the measure that matters to the schools and clinics that receive the money, it is small. Those companies were expected to spend about Rs 1,282 crore in 2025-26, roughly 3% of what Indian companies now report spending each year.

What the Bill changes, and what the committee wants

Bill provisions and committee recommendations as summarised by PRS Legislative Research, the committee’s report and law-firm notes on it (Fox Mandal, Vinod Kothari & Co., Cyril Amarchand Mangaldas). The 378-page report itself was read only in part.

Only the profit test moves. A company with a net worth of Rs 600 crore and a profit of Rs 4 crore stays in the regime; a company with a net worth of Rs 100 crore and a profit of Rs 9 crore leaves it. Lawyers have pointed out the asymmetry. The likely reason is simply that Rs 5 crore of profit was always a much lower bar than Rs 500 crore of net worth or Rs 1,000 crore of turnover, so it pulled in far more small companies.

The committee also objected to the Bill handing the government open-ended power, both to change the Rs 10 crore figure by rules and to exempt whole classes of companies, and asked that both be removed. It added a rule the Bill lacked: money given to trusts, societies or NGOs that a law, court or regulator has barred should not count as CSR.

Many companies, little money

The ministry’s figures are for obligations, not actual spending, and they are for 2025-26, a year whose spending is not yet reported. Set against the latest complete year, they look like this. In 2024-25, 24,228 companies reported CSR spending, totalling Rs 40,794 crore. The 11,204 companies that would leave are about 46% of them, and their obligation is about 3.1% of the money. The average company leaving owed about Rs 11.4 lakh a year.

This is the shape of CSR in India generally. An analysis of the ministry’s 2024-25 data by the Indian Institute of Corporate Affairs (IICA), published in October, shows that companies spending under Rs 1 crore each make up 82.6% of spenders but provide 13.3% of the money. The 93 companies spending Rs 50 crore or more provide 42.4%, and the 10 largest alone 17.5%.

Source: IICA, India CSR Factbook 2024-25, from the MCA National CSR Data Portal (data extracted 20 September 2026). The Factbook gives the spend share only for the smallest and largest bands; the middle two bands are shown together (*). Money: share of Rs 40,794 crore.

Practically every company that would leave falls into the smallest band: its obligation averages Rs 11 lakh, far below Rs 1 crore. On these figures they are a little over half of the 20,019 small spenders, and their Rs 1,282 crore is about a quarter of the roughly Rs 5,426 crore that band spent.

The burden being lifted was already light

The case for the change is compliance cost. But the heaviest piece of compliance, a separate board CSR committee, was already waived in 2021 for any company whose CSR spend is Rs 50 lakh or less. Almost none of the 11,204 companies has needed one: a company whose profits have stayed under Rs 10 crore owes at most about Rs 20 lakh. What they still carry is the spending itself, an annual CSR report in the board report and the CSR-2 form, and a penalty if money is left unspent and not transferred: twice the unspent amount or Rs 1 crore, whichever is lower. That penalty is rarely used. The ministry told Parliament that 26 companies were penalised for CSR defaults in the five years to 2023-24.

The Bill also lifts the committee exemption to Rs 1 crore. If the 11,204 small companies leave and the rest stay roughly where they were, about 13,024 companies would remain in the regime, and about 68% of them would spend under Rs 1 crore and so need no committee. Committees would be required of roughly 4,209 companies, the ones that spend most of the money. Two committee members dissented on this point, arguing that oversight of CSR spending was being thinned without any independent check put in its place.

Will the money actually go?

Not all of it. Small companies are the most generous relative to their obligation: about 61% of companies spent more than they had to in 2023-24, according to IndiaDataInsights, and Sattva Consulting found that small spenders were the most likely to overshoot. Sattva also counted 380 companies with no CSR obligation at all that spent Rs 809 crore in 2023-24. Some of the companies leaving the mandate will go on giving, especially those whose spending is tied to a local hospital, school or trust near their plant.

The loss will be local. Companies spending under Rs 1 crore work in an average of 1.9 development sectors and 1.4 states, against 8.4 sectors and 11 states for the largest spenders. Small-company CSR tends to stay close to home. The ministry’s estimate does not say which states or causes the Rs 1,282 crore currently reaches. CSR as a whole is concentrated: Maharashtra, Gujarat, Karnataka, Delhi and Tamil Nadu receive 54% of what can be traced to a state.

Set against the growth of CSR, the loss is small. Reported spending has risen from about Rs 10,066 crore in 2014-15 to Rs 40,794 crore in 2024-25, and by 13% to 17% a year in each of the last three years. A 3% cut in obligations would be made up within a few months of that growth, if it continues.

What would fix this

• Publish the ministry’s estimate in full. The 11,204-company figure and its Rs 1,282 crore were given to the committee but reached the public only through press reports. A table by state, development sector and implementing agency would show which NGOs and districts lose money.
• Let leaving companies finish what they started. Companies with multi-year “ongoing projects” at the time of the change should be required, or at least allowed, to complete them under the old rules, so that a scholarship or clinic funded for three years is not dropped after one.
• Simplify the form rather than only shrinking the list. For obligations under Rs 50 lakh, a one-page CSR filing would cut most of the cost of compliance while keeping the spending.
• Keep thresholds in the Act, and review them on a schedule. The committee is right that a figure which decides whether 11,000 companies pay should be set by Parliament, not by rules. A requirement to review all three triggers every five years, against inflation and company size, would avoid another long gap like 2013 to 2026.
• Count voluntary CSR. The CSR portal already records spending by companies with no obligation. Reporting it separately each year would show whether companies released from the mandate keep giving.

These are proposals from this blog, not recommendations any agency has adopted.

What this piece could not establish

The 11,204-company and Rs 1,282 crore figures are the ministry’s, as reported by ETCFO and The News Minute from the committee’s report; the relevant pages of the report were not read directly. They are obligations for 2025-26 and are compared here with actual spending in 2024-25, the latest complete year; the true share of spending lost could be a little higher or lower. How many of the leaving companies would keep spending voluntarily, and which states, districts and causes receive their money now, could not be found. The IICA Factbook gives spend shares only for the smallest and largest spending bands. The yearly series mixes portal snapshots: 2018-19 to 2020-21 come from earlier extracts quoted in Parliament and by Factly, and the portal’s figures for past years are revised as late filings arrive. Whether the Bill will be taken up in the Winter Session, and in what form, is not known. Nothing here is legal advice.

Sources and caveats

About this article: Researched, written and edited by Umashankar Triplicane Dwarakanathan, with AI research assistance; every figure is meant to trace to the primary source cited. See the Editorial Policy for how sourcing, AI use and corrections work.