Corporate Social Responsibility (CSR) has emerged as a pivotal mechanism for businesses to contribute to societal development. The mandate under the Companies Act 2013 requiring companies to allocate 2% of their average net profits towards CSR activities may be said to be moving in right direction. No doubt, that altogether, the corporates have moved towards enhanced transparency. However, the distribution of CSR funds has been evidently “uneven” across India’s diverse regions. States like Maharashtra, Karnataka, and Tamil Nadu, which already exhibit robust development indicators (as per the UNDP – HDI), have been the primary beneficiaries of CSR investments. On the other hand, as per a report by (The CSR Journal, 2015), the North-Eastern states, characterized by their unique challenges and developmental needs, have received a disproportionately small share of CSR funds.
Disparities in CSR Fund Allocation
The same “CSR Journal” report analysed a significant skew towards states housing major corporate operations. Maharashtra, for instance, topped the list with CSR expenditures amounting to approximately Rs. 5,500 crore in the financial year 2023 (Statista Research Department, 2024). Conversely, the North-Eastern region, encompassing states such as Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Sikkim, and Tripura, collectively received only about 7.7% of the total CSR funds in 2021-22, marking the second-lowest allocation since the CSR mandate’s inception. Assam, the largest recipient within the region, secured Rs. 319 crore, while other states averaged between Rs.100 crore and Rs.130 crore (Business Standard, 2023).
A Region in Need
The North-East continues to lag on multiple human development indicators, with states like Nagaland and Arunachal Pradesh scoring low on parameters such as maternal health, school retention rates, and employment opportunities (NITI Aayog, 2021). The lack of private sector presence in the region further limits CSR projects, thereby reinforcing the developmental divide. While government-led initiatives through the Ministry of Development of North Eastern Region (MDoNER) have begun bridging infrastructural gaps, these efforts need to be complemented by non-state actors—including corporates—for durable and inclusive impact.
Recognizing these issues, the Indian government has initiated several projects aimed at enhancing connectivity and infrastructure in the North-East. Notable among these are: the development of 4,000 km of roads, 20 railway projects spanning 2,011 km, and 15 air connectivity projects. Additionally, waterways connectivity is being improved through the development of national waterways on the Ganges, Brahmaputra, and Barak rivers (Drishti IAS, 2022). While these efforts are commendable, the integration of CSR initiatives can amplify the impact of such developmental endeavours.
Collaborative Efforts for Enhanced Impact
The Confederation of Indian Industry (CII) has underscored the importance of synergy between corporates and government bodies in the North-East. Through the launch of the North East CSR Connect project, CII aims to bolster CSR spending in the region by collaborating with approximately 100 non-governmental organizations over the next 5–6 years, thereby enhancing their capacity to attract corporate funds (Business Standard, 2024).
A Legislative Proposal for Equitable Development
To address the existing disparities in CSR fund allocation, I propose that companies with a CSR budget exceeding Rs.10 crore annually may be mandated to allocate at least 25% of their CSR funds to projects in the North-Eastern states over the next 10-15 years. This legislative measure would ensure a more balanced distribution of resources, facilitating targeted interventions in critical areas such as education, healthcare, skill development, and infrastructure within the region. I say this because we have to compensate a “missed opportunity” (from post mandatory CSR era till today).
Creation of Shared Value
Investing in the North-East will have multi-layered benefits. For corporations, it offers an opportunity to tap into an emerging market with available potential, nurturing goodwill and expanding their consumer base. For the region, such investments can catalyze socio-economic development, create employment opportunities, and enhance the quality of life for its residents. Besides, aligning CSR initiatives with the government’s developmental projects will lead to more sustainable and impactful outcomes. Remember the case of Swachh Bharat Mission when I say this!
The writer holds a PGDM from XISS and a PhD in Strategic CSR from Santiniketan. He is an IICA Certified ESG Practitioner. Currently he works for HPPI in New Delhi; Views are personal.
