The Act prescribes a mandatory spend of 2% of average net profits on social responsibility for all companies meeting specified requirements. The CSR law came as a response to the need for a balance between sustainable business and social progress in India. The changing environment of policies to enable sustainable practices increased participation in CSR and socially inclusive practices. CSR has changed the role of doing business in the society, from simple encouragement of more social duties for business to the understanding of being socially responsible. With the CSR law mandate, companies have started spending and utilising the CSR opportunity to make a meaningful contribution to the development sector.

In the last five years, companies in India have shown gradual but progressive trends towards CSR compliance. The data of CSR spend in 2017-18 shows a 65% increase since 2014- 15, with an increasing number of companies utilising their earmarked CSR budget. Schedule VII of Section 135 of Companies Act 2013, initially defined 11 (amended in 2015) potential areas that can be considered by a company for expenditure in CSR. A separate CSR arm was constituted under the Ministry of Corporate Affairs (MCA) to oversee the engagements of corporates in CSR activities and to ensure transparency through annual public disclosures on the status of CSR within the country. The trends from the last four financial years highlight that education, health and rural development receive the highest CSR funding across regions.