According to the Development Intelligence Unit’s (DIU) August report, “Investing in Tomorrow: Need for Realigning CSR Spends with Status of Development in Districts,” in FY 2022–23, India’s CSR spending hit Rs 29,989.92 crore, up 12.8% from the prior year, signaling post-pandemic recovery. Yet, deep flaws undermine its impact: geographical skews, poor evaluations, sectoral biases, opacity, overlap with government efforts, and minimal community involvement.

Despite CSR being a statutory obligation for over five years, 70% of companies still lack a structured strategy for implementation, raising concerns about the CSR fund allocation and its lack of convergence with India’s commitment towards meeting SDG targets by 2030.

Geographical Imbalance

CSR funds chase corporate footprints—headquarters and operations—favoring industrialized states like Maharashtra (Rs 2,250 crore in FY 2021–22, 15% of total), Karnataka, Gujarat, Tamil Nadu, Andhra Pradesh, Telangana, and Delhi. In contrast, high-need areas like Jharkhand, Chhattisgarh, Bihar, Odisha, Madhya Pradesh, and Northeast states—home to >60% of NITI Aayog’s Aspirational Districts—get <20% of funds. This starves underserved regions, eroding CSR’s equity role.

Sectoral Skew and Lack of Impact Assessment

Spending clusters in familiar areas (e.g., education, health), ignoring broader gaps. Worse, few projects face rigorous evaluation—relying on outputs (e.g., toilets built) over outcomes (e.g., sustained hygiene). This breeds unaccountable, inefficient choices, blocking data-driven tweaks and long-term value.

Duplication and Coordination Gaps

CSR often echoes government schemes (mid-day meals, sanitation, skills training), with multiple firms redundantly funding classrooms or health camps sans local sync. Resources waste on overlaps, bypassing critical “last-mile” needs like maintenance, tribal outreach, or supply chains for vulnerable groups (e.g., single-woman households).

Top-Down Design Lacking Innovation

Projects roll out via corporate templates, sidelining community input or deprivation data—turning CSR into branding over real change (e.g., flashy classrooms amid unchecked dropouts).

Rare innovations like multi-year, place-based partnerships or outcome financing foster short-term fragmentation, missing systemic wins.