Billionaires like Musk have unimaginable wealth, but in India, big companies must legally spend 2% of profits on social good. Here is how to track that money.
You have probably seen the math: Elon Musk is so rich that if you earned ₹40 crore every single year since the time of Jesus (2,000 years ago), you would still have less than 10% of his net worth. When wealth reaches that scale, it feels like a glitch in the simulation. In India, we see this contrast every day—shiny glass tech parks standing right next to government schools with leaking roofs. But here is the thing: those companies aren't just allowed to sit on those piles of cash. Under Indian law, if a company makes a certain amount of profit, they are legally required to spend a portion of it on you—the community. This is called Corporate Social Responsibility (CSR). If that factory down the road is minting crores but the local dispensary is empty, you have the right to ask where their CSR money went. You do not need to be a shareholder to demand transparency; you just need to know how to navigate the data.
India was the first country in the world to make CSR mandatory by law. This is governed by Section 135 of the Companies Act, 2013. Unlike other countries where 'charity' is voluntary, the Indian government decided that if you use the country’s resources, infrastructure, and people to make a profit, you must give back.
Who has to pay? According to Section 135(1), any company registered in India (including foreign companies with offices here) must spend on CSR if they meet any of these three criteria in the preceding financial year:
How much? They must spend at least 2% of their average net profits made during the three immediately preceding financial years. If the company is new (less than three years old), they calculate it based on the years they have been active.
What can they spend on? Companies cannot just spend this money on a fancy office party or branding. Schedule VII of the Companies Act lists specific areas where CSR money can go. This includes eradicating hunger and poverty, promoting education, gender equality, environmental sustainability, protecting national heritage, and even contributing to the Prime Minister’s National Relief Fund. Crucially, the law says companies should give preference to the local area where they operate. If a mining company is active in Odisha, they should be spending their CSR money in those specific districts of Odisha, not just in a posh South Delhi NGO.
The 2021 Shift: From "Explain" to "Spend" Before 2021, if a company didn't spend the money, they could just explain why in their annual report and walk away. Now, the law is much stricter. Under Section 135(5) and (6), any unspent money must be transferred to a specific "Unspent CSR Account" within 30 days of the end of the financial year. If the money is not tied to an ongoing project, it must be moved to a government-specified fund (like the Swachh Bharat Kosh) within six months. If they fail to do this, the company can be fined up to twice the amount they were supposed to transfer, and every officer in default can face a penalty of 1/10th of that amount.
Tracking a billionaire's personal bank account is impossible, but tracking a company's CSR spending is a matter of public record. Here is how you do it.
Every company in India has a 21-digit Corporate Identification Number (CIN). You need this to ensure you are looking at the right entity (e.g., 'Tata Motors' vs 'Tata Steel').
This is the most powerful tool for a civic-action enthusiast. The Ministry of Corporate Affairs (MCA) maintains a dedicated dashboard that maps every rupee spent.
For the top 1,000 listed companies (like Reliance, Infosys, or Adani), a simple summary isn't enough. They must file a BRSR. This report is gold because it details exactly which villages they worked in and how many people were affected.
Many CSR projects are coordinated through the District Administration to avoid duplication of work.
If a company says they have an 'Ongoing Project', the law allows them to keep that money in a special bank account for up to three financial years.
If you find that a company is lying—for example, they claim a park exists that is actually a wasteland—you can flag it to the Registrar of Companies (ROC).
If you are looking at rural projects specifically, it helps to understand how government spending works in those same areas. Check our MGNREGA vigilance toolkit to see how to track public vs private funds in villages. For more ways to hold powerful entities accountable, you can Browse all civic-action guides.
Tracking CSR looks easy on paper, but the "intent" of the law often hits a wall of corporate bureaucracy. Here is where you will likely get stuck and how to push through:
The Data Lag: The National CSR Portal is not a live feed. Companies usually file their annual returns (Form AOC-4 NB CSR) months after the financial year ends. If you are looking for what a company spent last month, you won't find it.
The "Local Area" Ghosting: The law says companies should give preference to the local area where they operate. However, many big firms dump their entire budget into a centralized foundation in a different state.
Vague Project Names: You might see an entry like "Educational Support — ₹50 lakh." This tells you nothing. Was it for building a school or just printing brochures?
The "Administrative Overheads" Trick: Sometimes, the money is "spent," but most of it goes to the salaries of the company's own CSR staff rather than the project.
Use this when the website is vague or you want to suggest a local project.
Subject: Inquiry regarding CSR Expenditure in [Your District/Area] – [Company Name]
Dear Company Secretary,
I am writing as a resident of [Your Area], where [Company Name] operates its [Factory/Office].
Under Section 135 of the Companies Act, 2013, and the "local area preference" specified therein, I am interested in understanding the specific CSR interventions undertaken by the company in our district for the financial year 2025-26.
The current disclosures on the National CSR Portal do not specify the impact metrics for the [Project Name] located in our vicinity. Could you please share:
We believe there is a significant need for [mention a specific need like 'primary school repairs' or 'water filtration'] in this locality, which aligns with Schedule VII.
Looking forward to your response.
Regards, [Your Name]
Use this if you suspect a company is faking its CSR numbers or hasn't filed for years.
To: Central Public Information Officer (CPIO), Ministry of Corporate Affairs
Subject: Request for Information under Section 6(1) of the RTI Act, 2005.
Details of Information required:
[Note: Attach the ₹10 fee as per your state rules.]
1. Can a company just give money to the PM CARES Fund and call it a day? Yes. Contribution to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the Central Government for socio-economic development is a valid CSR activity under Schedule VII. While the law encourages "local area" spending, it doesn't strictly forbid just cutting a cheque to a central fund.
2. What happens if a company spends more than the 2% requirement? If a company spends more than the required 2%, they can "set off" this excess amount against their CSR spending requirements for the next three financial years. However, the Board must pass a resolution for this, and the excess amount cannot include any surplus arising out of CSR activities (like interest earned on CSR funds).
3. Is it CSR if a company gives its own products for free? No. CSR must be an "expenditure." If a laptop company gives its own laptops to a school, it is generally considered a marketing or business expense, not CSR, unless it is done through a registered NGO and accounted for at cost price without any profit margin, following strict MCA circulars.
4. Can I suggest a project to a company? Absolutely. Most companies have a CSR Committee (mandated by Section 135(1)). You can find the members' names in the Annual Report. While they aren't legally forced to take your suggestion, they often look for "shovel-ready" projects in local areas to fulfill their legal preference requirements.
5. How do I report a company that is lying about its CSR? If the portal says they built a park in your colony but there is only a wasteland, you can file a complaint with the Registrar of Companies (ROC) of your state. You can do this via the "Investor Complaint" form on the MCA21 portal. Provide photos and the CIN of the company as evidence.
6. Does CSR money cover political donations? Never. Section 182 of the Companies Act deals with political contributions, and these are strictly prohibited from being counted as CSR. Similarly, any activity that benefits only the employees of the company and their families does not count as CSR.
7. Is there a penalty for the CEO if they don't spend the money? Yes. Under Section 135(7), if a company defaults on transferring unspent money to the designated funds, the company faces a penalty of twice the amount required to be transferred or ₹1 crore (whichever is less). Every officer in default (which includes the CEO/CS) can be fined 1/10th of that amount or ₹2 lakh (whichever is less).
Yes. Contribution to the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES Fund) or any other fund set up by the Central Government for socio-economic development is a valid CSR activity under Schedule VII. While the law encourages "local area" spending, it doesn't strictly forbid just cutting a cheque to a central fund.
If a company spends more than the required 2%, they can "set off" this excess amount against their CSR spending requirements for the next three financial years. However, the Board must pass a resolution for this, and the excess amount cannot include any surplus arising out of CSR activities (like interest earned on CSR funds).
No. CSR must be an "expenditure." If a laptop company gives its own laptops to a school, it is generally considered a marketing or business expense, not CSR, unless it is done through a registered NGO and accounted for at cost price without any profit margin, following strict MCA circulars.
Absolutely. Most companies have a CSR Committee (mandated by Section 135(1)). You can find the members' names in the Annual Report. While they aren't legally forced to take your suggestion, they often look for "shovel-ready" projects in local areas to fulfill their legal preference requirements.
If the portal says they built a park in your colony but there is only a wasteland, you can file a complaint with the **Registrar of Companies (ROC)** of your state. You can do this via the "Investor Complaint" form on the MCA21 portal. Provide photos and the CIN of the company as evidence.
Never. Section 182 of the Companies Act deals with political contributions, and these are strictly prohibited from being counted as CSR. Similarly, any activity that benefits only the employees of the company and their families does not count as CSR.
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