Finance and Corporate Affairs Minister Nirmala Sitharaman on Monday said the government has explored the potential of CSR funds to boost innovation, social enterprises and mission-driven organisations capable of delivering scalable social impact across the country.

“Yes sir,” Sitharaman said in a written reply to a question in the Lok Sabha.

The minister said the legal framework for Corporate Social Responsibility (CSR) is laid out under Section 135 of the Companies Act, 2013, Schedule VII of the Act, and the Companies (CSR Policy) Rules, 2014. Schedule VII lists the activities that companies can undertake as part of their CSR obligations, and these, she said, “are broad-based and may be interpreted liberally so as to capture the essence of the subjects enumerated therein.”

The activities under Schedule VII are broadly aligned with national development priorities and span sectors such as education, environmental sustainability, gender equality, healthcare, livelihood enhancement, skill development, eradication of hunger, safe drinking water, sanitation, slum area development, rural development, and reduction of inequalities faced by socially and economically backward groups.

Companies can also route CSR funds through four designated funds — the Clean Ganga Fund, the Prime Minister’s National Relief Fund (PMNRF), the Prime Minister’s Citizen Assistance and Relief in Emergency Situations Fund (PM CARES), and the Swachh Bharat Kosh — enabling scalable social impact nationwide.

Sitharaman further pointed out that item (ix) of Schedule VII allows companies to contribute to incubators or research and development projects in science, technology, engineering and medicine, helping boost innovation-led ventures.

Under Section 135 of the Companies Act read with Rule 4(1) of the Companies (CSR Policy) Rules, 2014, the board of a company can carry out CSR activities either directly or through a Section 8 company, registered public trust or society meeting tax-exemption criteria under the Income Tax Act, 1961, an entity established under an Act of Parliament or State legislature, or an implementing agency with at least three years’ track record in similar activities. This framework, Sitharaman said, facilitates partnerships between companies and suitable implementing agencies.

The Ministry, she added, has widened the scope of Schedule VII through a notification dated May 27, 2026, introducing a new item (xiii) — “subscription to zero coupon zero principal instruments on the Social Stock Exchange.” The amendment is expected to boost fundraising for not-for-profit organisations working on public welfare projects in a transparent and regulated manner.