Corporate Social Investments Expand as Companies Seek Credible NGO Partners
NEW DELHI (India CSR): India’s corporate social responsibility (CSR) spending reached Rs 34,909 crore in FY24, highlighting the increasing scale of corporate-led social investments and the growing need for credible partnerships with non-governmental organisations (NGOs), according to a report by CareEdge Analytics and Advisory.
The report indicates that CSR in India is gradually evolving from compliance-driven spending to strategy-led social investment, as companies seek measurable impact and improved governance in their social initiatives.
CSR Growth Reflects Expanding Social Investment
India’s CSR spending has shown consistent growth over the past few years. According to the report, CSR expenditure recorded a compound annual growth rate (CAGR) of 8.74 per cent between FY20 and FY24.
During this period, CSR initiatives expanded significantly across the country. Companies implemented 59,633 projects across 36 states and union territories, reflecting the increasing scale and diversity of corporate social initiatives.
CSR in India was formally institutionalised under the Companies Act, 2013, which mandates eligible companies to allocate at least 2 per cent of their average net profits from the previous three financial years toward social development initiatives.
Private Sector Leads CSR Contributions
The report highlights the dominant role played by private sector companies in CSR spending.
In FY24:
- Private sector companies contributed Rs 30,136 crore
- Public sector undertakings (PSUs) contributed Rs 4,773 crore
Private companies accounted for the majority of CSR spending, which aligns with the structure of the CSR ecosystem where non-PSU firms represent nearly 97 per cent of companies under the CSR framework.
Education and Healthcare Receive the Largest Share
Among the various sectors supported by CSR funding, education and healthcare remained the top priorities for corporates.
The report notes that:
- Education received 34.76 per cent of total CSR allocations
- Healthcare accounted for 20.48 per cent
Together, these two sectors absorbed more than half of India’s CSR funds, reflecting alignment between corporate philanthropy and national development priorities.
CSR spending on education exceeded Rs 12,000 crore in FY24, benefiting approximately 10.78 crore children in primary schools.
Meanwhile, healthcare projects received more than Rs 7,000 crore, supporting initiatives ranging from medical infrastructure and preventive healthcare to community health programmes.
Other sectors also received significant support:
- Rural development: nearly Rs 2,400 crore
- Environmental sustainability: nearly Rs 2,400 crore
Regional Distribution of CSR Remains Uneven
The report highlights significant geographic disparities in CSR funding across India.
Maharashtra emerged as the largest recipient, attracting over 17 per cent of total CSR spending, amounting to more than Rs 6,000 crore.
It was followed by Gujarat, which received over Rs 2,700 crore.
In contrast, most Northeastern states—except Assam—received less than Rs 85 crore each, indicating uneven distribution of CSR funds across the country.
According to the report, this imbalance is partly due to the “local area preference” provision in the Companies Act, which encourages companies to invest in communities where they operate. As a result, industrialised states tend to receive higher CSR allocations compared to remote regions.
Compliance Trends Strengthen Across Companies
The report also points to improving compliance behaviour among companies.
The proportion of companies spending more than the mandated CSR amount increased significantly, rising from 34 per cent in FY20 to 63 per cent in FY24.
This trend reflects a broader shift in corporate thinking.
Companies are increasingly viewing CSR not merely as a statutory obligation but as a long-term investment that enhances social impact, brand value, and stakeholder trust.
CSR Spending Concentrated Among Large Corporates
Despite overall growth, CSR spending remains concentrated among a relatively small number of large companies.
The report notes that:
- More than 78 per cent of companies spend between Rs 0 and Rs 50 lakh annually
- Only 1.5 per cent of companies spend more than Rs 10 crore
- Just five companies spent over Rs 500 crore on CSR in FY24
This indicates that while CSR participation is widespread, large corporates continue to drive the bulk of India’s CSR investments.
India’s Expanding NGO Ecosystem
India has a vast network of civil society organisations that implement social development programmes.
According to the report, more than 4.43 lakh NGOs were registered on NITI Aayog’s NGO Darpan portal as of September 2025.
While this large ecosystem creates opportunities for collaboration, it also introduces challenges for companies seeking credible and accountable implementation partners.
Many NGOs lack consistent governance practices, transparency mechanisms, and reporting standards, which can make it difficult for corporates to ensure measurable impact from their CSR investments.
NGO Grading Emerging as a Key Solution
To address these challenges, the report highlights NGO grading as an emerging mechanism to improve accountability and strengthen partnerships between corporates and civil society organisations.
By assessing NGOs on parameters such as governance standards, operational transparency, and programme effectiveness, grading systems can help companies identify reliable partners for implementing CSR projects.
“Education receives the highest allocation at around 35 per cent of total CSR spending, followed by healthcare at approximately 20 per cent. As CSR moves from compliance to strategy, credible and accountable NGOs are critical to translating these investments into lasting social impact,” said Tanvi Shah, Senior Director at CareEdge Analytics and Advisory.
“With CSR spending close to Rs 35,000 crore, much of it concentrated in a few sectors and states, the real question now is how well this money is being used,” added Amir Shaikh, Assistant Director at the firm, noting that grading helps guide companies toward partners with strong governance and proven delivery capabilities.
Strengthening CSR Impact in India
CareEdge Analytics and Advisory believes that structured NGO grading frameworks can bridge the gap between CSR funders and implementing organisations.
By improving transparency, governance, and evaluation mechanisms, such frameworks could help ensure that India’s rapidly growing CSR capital translates into deeper, more inclusive, and sustainable social impact across the country.
