The Bihar CSR Policy, lacking representation from industry, CSR experts, and academia, and driven by a bureaucratic, undemocratic committee structure, risks inefficiency and weak corporate engagement.

Rusen Kumar Founder and Managing Editor India CSR

By Rusen Kumar

In July 2025, the Bihar government launched its Corporate Social Responsibility (CSR) Policy, a long-overdue attempt to harness private sector investments for the state’s socio-economic development. Coming a decade after the 2013 mandate under Section 135 of the Companies Act, which requires eligible companies to spend 2% of their net profits on CSR, the policy aims to address Bihar’s historically low share of national CSR funds. Aimed at harnessing corporate investments to address the state’s socio-economic challenges, the policy introduces a Bihar CSR Society, a dedicated CSR portal, and a governing body chaired by the Chief Secretary to streamline contributions from 24,932 eligible companies nationwide.

At a press briefing held in Patna on July 11, 2025, Anand Kishore, Principal Secretary of the Finance Department, shared key details of the new policy, announcing the formation of a dedicated CSR Society, which is set to be formally registered soon. The society will be governed by a body chaired by Bihar’s Chief Secretary and comprised of senior officials from 21 departments. An executive committee, headed by the Principal Secretary of the Finance Department, will be responsible for managing its operations.

However, its execution framework, dominated by bureaucrats and lacking representation from industry, CSR experts, and academia, reveals a critical gap in understanding modern CSR governance. The absence of a 360-degree approach—encompassing planning, execution, monitoring, and impact assessment—and the 4P model (People, Private Sector, Partnership, Progress) undermines its potential, risking it becoming a mere bureaucratic exercise.

CSR is a mandatory compliance for companies, requiring 2% of net profits for social initiatives. These funds offer state governments opportunities to address local issues aligned with the 17 Sustainable Development Goals.

***

A Decade-Late Policy: Missed Opportunities

India’s CSR law, enacted in 2013, mandated that companies with a net worth of Rs 500 crore, turnover of Rs 1,000 crore, or net profit of Rs 5 crore spend 2% of their average net profits on CSR activities. While states like Maharashtra, Karnataka, and Gujarat capitalized on this mandate, securing Rs 2,846.73 crore, Rs 1,222.44 crore, and Rs 1,059.41 crore respectively in 2019, Bihar’s share was a mere Rs 136.43 crore, or 0.62% of the national total (Rs 71,277 crore) from 2015 to 2019., This dismal performance reflects a lack of proactive engagement with corporates, a gap the 2025 policy aims to address but arrives a decade too late.

The policy’s execution framework, led by a bureaucratic committee under the Chief Secretary, lacks the vibrancy and inclusivity needed for impactful CSR. More critically, it fails to demonstrate an understanding of the comprehensive, 360-degree approach required for effective CSR governance, which demands meticulous planning, robust execution, rigorous monitoring, and measurable impact assessment.

The delay has cost Bihar critical developmental opportunities. With unemployment rampant and urban poverty at 32.91% (compared to the national average of 23.62%), the state could have leveraged CSR funds for education, skill development, and healthcare. The late launch underscores a systemic failure to prioritize CSR as a tool for public-private partnership, a model that has driven sustainable development in states like Karnataka.

It is to be noted that CSR is a scientific, evidence-based developmental approach and is a rupee-measurable investment, making impact assessment critical. Effective CSR requires strategic planning, execution, monitoring, and evaluation to ensure funds create tangible outcomes like jobs, education, or healthcare access. Without a measurable impact, CSR risks becoming a mere expense, failing to deliver sustainable socio-economic benefits for communities.

***

Critique: An Exclusionary Execution Framework

The Bihar CSR Policy 2025 is monitored by a governing body under the Chief Secretary and an executive committee led by the finance department. While the policy promises a streamlined portal and a mega seminar to attract corporates, its execution committee lacks representation from key stakeholders—industry, CSR experts, and academia—rendering it a bureaucratic exercise rather than a vibrant, democratic platform.

Failure to Adopt a 360-Degree CSR Approach

Effective CSR requires a holistic framework that integrates strategic planning, stakeholder-driven execution, continuous monitoring, and impact evaluation. This 360-degree approach ensures that projects align with community needs, corporate goals, and national priorities like the UN SDGs or Schedule VII of the Companies Act. For instance, successful CSR programs employ data-driven planning to address gaps, coupled with real-time monitoring to ensure scalability and impact. Bihar’s policy, however, appears to treat CSR as a bureaucratic checklist, lacking mechanisms for participatory planning or outcome measurement. This oversight risks creating projects that fail to deliver sustainable benefits or attract corporate trust.

The 4P Model: A Missing Foundation

This model’s absence renders the policy a bureaucratic exercise, unlikely to inspire corporate confidence or deliver sustainable results. The 4P model—People, Private Sector, Partnership, Progress—is critical for effective CSR, yet absent in Bihar’s policy.

Bureaucratic Ignorance of CSR Governance

The policy’s reliance on a finance department-led committee suggests that Bihar’s bureaucracy is not fully aware of the complexities of CSR governance. Modern CSR demands expertise in stakeholder engagement, compliance with regulatory frameworks, and transparent reporting, where multi-stakeholder councils drive CSR success. Bihar’s committee, lacking professionals, risks mismanaging funds due to an inadequate understanding of CSR strategy, compliance, or impact metrics. CSR Leaders could guide Bihar in designing community-centric projects, while domain expertise could address regional disparities.

No Industry Representation

The exclusion of industry leaders from the CSR committee is a critical flaw, as corporates are the primary contributors to CSR funds. Local industrial association or companies having robust CSR programs in the state could align corporate priorities with state needs. Without industry voices, the committee risks designing projects that fail to leverage corporate expertise or meet market-driven demands, potentially deterring investments. The absence of industry input may perpetuate Bihar’s low CSR inflow, which was only Rs 297 crore in 2022-23, far below its proportional entitlement of 10% of national funds.

Lack of CSR Experts

The committee’s failure to include seasoned CSR professionals, Development organisations, and leaders from NGOs is a significant oversight. Experts bring decades of experience in strategic CSR planning, impact assessment, and compliance with Schedule VII of the Companies Act. Their expertise could ensure that Bihar’s CSR projects are innovative, scalable, and aligned with national priorities like UN SDGs. Without such experienced professionals, the committee risks repeating past mistakes, such as incomplete project disclosures. The absence of such voices limits the committee’s ability to design high-impact projects or navigate the complexities of CSR compliance.

Exclusion of Academia

The omission of professional academic institutions or Bihar-based universities is a missed opportunity to ground the policy in evidence-based research., Academia could provide data-driven insights into Bihar’s challenges addressing SDGs. Academic partners could also monitor project outcomes, ensuring accountability and long-term impact. Without their involvement, the policy risks prioritizing short-term projects over sustainable solutions, a concern echoed in critiques of Bihar’s earlier CSR efforts. Their exclusion deprives the policy of evidence-based strategies and independent evaluation, critical components of a 360-degree CSR approach.

Bureaucratic and Undemocratic Structure

The committee’s bureaucratic dominance, led by the Chief Secretary and finance department, lacks the vibrancy and democratic ethos needed for effective CSR governance. A truly inclusive committee would function as a collaborative platform, integrating diverse perspectives to foster innovation and trust. Instead, the current structure mirrors a government department, potentially stifling corporate engagement due to red tape or lack of transparency. The National CSR Portal has highlighted issues with data accuracy and incomplete disclosures, suggesting that bureaucratic systems alone cannot ensure effective CSR management. Bihar’s top-down approach risks alienating stakeholders and stifling innovation, reflecting a lack of awareness about participatory CSR models that prioritize transparency and inclusivity.

***

Why the Delay and Exclusion Matter

Bihar’s decade-long delay in formulating a CSR policy has left it trailing states that proactively engaged corporates. Bihar’s failure to establish a CSR Fund Trust, proposed in 2019 by then-Deputy CM Sushil Kumar Modi, further highlights its sluggish approach. The exclusion of industry, experts, and academia exacerbates this, as it limits the policy’s ability to address Bihar’s unique challenges—high unemployment, inadequate healthcare, and rural poverty—through innovative, scalable solutions.

***

Recommendations for a Vibrant, Democratic CSR Framework

To address these shortcomings and create a robust, inclusive CSR ecosystem, the Bihar government should:

Adopt a 360-Degree Approach: Integrate planning, execution, monitoring, and impact assessment, using data-driven needs analysis and transparent systems.
Incorporate Industry Leaders: Include representatives from local industrial bodies and corporates to ensure projects align with corporate expertise and priorities, boosting investment inflows.
Engage CSR Experts: Appoint leading experts and professionals to guide project design, compliance, and impact assessment. Their involvement could mirror the success of platforms.
Partner with Academia: Collaborate with professional academic institutions and universities to conduct needs assessments, monitor outcomes, and develop innovative solutions for issues like water scarcity and education.
Foster a Democratic Structure: Restructure the CSR Society as a vibrant, multi-stakeholder platform with transparent decision-making processes, inspired by models.
Enhance Transparency: Publish detailed project guidelines and impact reports on the CSR portal, addressing gaps noted in the National CSR Portal.
Accelerate Implementation: Launch the CSR portal and seminar promptly, with clear timelines and incentives to attract corporates, learning from the decade-long delay.