Blog · 28 Oct 2026
Why does CSR money go to richer states?
In today’s Finshots, we look at how Indian companies spend their CSR (Corporate Social Responsibility) money, why some aspects of this spending seem bro…
In today’s Finshots, we look at how Indian companies spend their CSR (Corporate Social Responsibility) money, why some aspects of this spending seem broken, and how we could fix them.But before we begin, if you’re someone who loves to keep tabs on what’s happening in the world of business and finance, then hit subscribe if you haven’t already.
We strip stories off the jargon and deliver crisp financial insights straight to your inbox. Just one mail every morning. Promise!If you’re already a subscriber or you’re reading this on the app, you can just go ahead and read the story.The StoryBack in 2014, India did something few countries had attempted before. It made corporate charity mandatory.
Meaning, under Section 135 of the Companies Act, companies with a net worth of at least ₹500 crore, a turnover of ₹1,000 crore (or more), or a net profit of ₹5 crore (or more) must spend at least 2% of their average net profits over the previous three years on social causes.This is called Corporate Social Responsibility (CSR). And companies have to fund it out of their own pockets. The government doesn’t allow them to claim CSR spending as a normal business expense under the Income Tax Act.Over the years, this has created a massive pool of money.