Parliament Question: Unspent CSR funds by the Companies

**Executive Summary** This document is a response by the Minister of State in the Ministry of Corporate Affairs to unstarred question No. 2398 in the Lok Sabha, answered on December 15, 2025, regarding unspent Corporate Social Responsibility (CSR) funds by companies. It clarifies the deadline for FY 2024-25 CSR expenditure filings and outlines the procedures for addressing CSR violations. Companies have until December 31, 2025 to file CSR details for FY 2024-25. **Key Points / Main Content** * **Reporting of CSR Expenditure:** * Disclosures related to CSR expenditure are reported in the CSR Annual Report, which is filed with the annual filing of returns. * Companies have until December 31, 2025, to complete their annual filings pertaining to FY 2024-25, including CSR expenditure details. * **Action Against Non-Compliant Companies:** * Action is initiated against companies violating CSR provisions after examination of records and due process of law. * Companies penalised and the penalty amount imposed in the last three financial years (FY 2022-23, 2023-24, and 2024-25) are as follows: * FY 2022-23: 6 companies penalised, total penalty of Rs. 2.97 cr. * FY 2023-24: 11 companies penalised, total penalty of Rs. 3.32 cr. * FY 2024-25: 13 companies penalised, total penalty of Rs. 13.65 cr. * Total (across 3 years): 30 companies penalised, total penalty of Rs. 19.94 cr. * **National CSR Audit and Monitoring Authority & Direct Allocation to MPs:** * No proposal is under consideration to constitute an independent National CSR Audit and Monitoring Authority. * No proposal is under consideration to allocate CSR funds directly to Members of Parliament (MPs). * **CSR Implementation and Monitoring:** * The Board of the company is required to disclose the CSR Policy implemented by the company in its Board report. * The Board must ensure that disbursed funds have been utilised for the approved purposes. * The Chief Financial Officer (CFO) or responsible person must certify the fund utilisation. * Companies with websites are required to disclose the composition of the CSR Committee, CSR Policy, and approved CSR projects on their websites. * Expenditure on CSR activities is required to be audited by statutory auditors. * The Companies (Auditor's Report) Order, 2020 ("CARO, 2020") requires auditors to report details of unspent CSR amounts. * **CSR Governance:** * CSR is a Board-driven process; the Board plans, decides, executes, and monitors CSR activities based on the recommendations of its CSR Committee. * The Government does not issue directions to corporations regarding specific areas or activities for CSR spending. **Impact Analysis** **Stakeholder: Companies** **Impact** Affected companies must comply with CSR provisions, report CSR expenditure in their annual reports, and ensure proper utilisation of funds. **Action Required** Companies must file their FY 2024-25 CSR details by December 31, 2025. They must also adhere to disclosure and audit requirements. Non-compliant companies may face penalties. **Stakeholder: Boards of Directors** **Impact** Responsible for CSR policy, oversight, and compliance. **Action Required** Disclose CSR policy in the board report, ensure funds are utilised for approved purposes, and have the CFO or responsible individual certify fund utilization. **Stakeholder: Chief Financial Officers (CFOs) / Responsible Persons** **Impact** Accountable for the proper financial management of CSR funds **Action Required** Certify to the effect that funds have been disbursed for the purposes and in the manner as approved. **Stakeholder: Statutory Auditors** **Impact** Auditors are now required to report on unspent CSR amounts per CARO 2020. **Action Required** Auditors must verify that CSR expenditure is reported as per the applicable standards.

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