While many corporations are genuinely committed to social welfare, issues like fund misallocation, tokenism and unethical practices threaten the integrity of CSR

Corporate Social Responsibility (CSR) in India has significantly progressed over the past decade. Introduced as a legal mandate in 2013, CSR has evolved from a mere compliance obligation to a fundamental requirement, with organisations across various industries incorporating social welfare into their core operations. However, as we continue into 2025 and beyond, there is an urgent need to elevate the current CSR practices- ensuring they are effective, accountable, and transparent.

While many companies have shown a sincere commitment to social impact, others have unfortunately fallen into the vicious traps of misallocation of funds, tokenism, and questionable practices like kickbacks and paybacks. Additionally, the emergence of corporations establishing their NGOs presents a mixed picture; while some are genuinely committed to their missions, many operate as “skeleton NGOs,” where staff often demand kickbacks and the intended social welfare purpose gets lost.

A New and Enhanced Era for CSR Compliance 

Compliance remains an important aspect of effective CSR. However,  it is not just about meeting the mandatory spending requirement but also about ensuring that every rupee spent reaches where it was originally intended—directly benefiting those in need. While many corporations have dutifully allocated the mandated 2 per cent of their profits towards social welfare, there is still a need for a more robust system to ensure regular oversight and real-time monitoring of fund utilisation and project outcomes. With stronger and more transparent laws, we can ensure that funds reach the intended beneficiaries, fostering trust between the government, corporations, and communities alike.

Ensuring Integrity in CSR: Addressing Kickbacks and Paybacks  One of the biggest challenges facing CSR today is the lack of trust caused by unethical practices. Often, when intermediaries or implementing agencies misappropriate resources for personal gain, the integrity of CSR initiatives is compromised. To address this issue, it is vital to introduce strict anti-corruption policies and establish independent monitoring mechanisms.

When corporations know they are being monitored or supervised, they will think twice before engaging in malpractice.

Ensuring integrity is not just about preventing financial losses; it is about preserving the trust of communities that often rely on CSR for a better future.

Impact-Driven CSR

CSR should move beyond compliance; it needs to be impact-driven. The focus should shift from merely fulfilling legal obligations to measuring the difference being made on the ground. Strengthening accountability will ensure CSR is not reduced to a token gesture but becomes a genuine agent of transformation. Moreover, corporations should also embrace innovation in their CSR approaches. Whether it is by using technology to improve healthcare access in rural areas, providing quality education through digital platforms, or addressing climate change with green initiatives, one must think beyond traditional models and adopt solutions that leave a lasting impact.

The Role of Stakeholders Accountability is not just the sole responsibility of corporations; other stakeholders—governments, NGOs, and civil society—also have an essential role to play in shaping the future of CSR. The government must act as an active regulator, ensuring companies adhere to guidelines while incentivising innovation and collaboration. On the other hand, NGOs, as implementation partners, must continue to bring grassroots expertise and ensure that every rupee spent makes  a difference. Communities must also be empowered to hold corporations accountable. By involving local stakeholders in the planning and execution of projects, we can create a feedback loop that enhances transparency and boosts the on-the-ground impact of CSR initiatives.

The Way Forward

The ongoing changes to the CSR framework present a golden opportunity to usher in a new era of accountability and impact. This calls for a change that ensures CSR initiatives are not only executed with integrity but with genuine purpose. The government, too, must play its part by introducing reforms that incentivise genuine efforts while penalising any kind of malpractice.

If implemented correctly, this strengthened CSR framework can ensure that social welfare is not merely a checkbox for corporations but a collective mission to uplift the underserved. As stakeholders in this ecosystem—corporates, nonprofits, government, and the public—we must all push for a transparent and impactful CSR environment. Only then will CSR in India live up to its promise of creating a better world for all.

(The writer is founder an d president, Wishes and Blessings NGO; views expressed  are personal)