Govt amends CSR norms; provides more leeway for cos

India's Ministry of Corporate Affairs (MCA) has significantly relaxed Corporate Social Responsibility (CSR) norms, effective May 28, 2026, granting companies much-sought-after operational leeway. The amendments allow firms to carry forward excess CSR spending for up to three subsequent financial years and clarify limits on administrative overheads, addressing long-standing industry demands for greater flexibility in compliance. This overhaul follows persistent advocacy from industry bodies, aiming to shift CSR from a compliance burden to a strategic investment. Previously, companies often faced a "use it or lose it" dilemma, leading to hurried project execution at year-end. The new rules, particularly regarding Section 135 of the Companies Act, 2013, are designed to encourage more deliberate, multi-year projects, potentially enhancing the real-world impact of India's annual Rs 25,000 crore (approx $3 billion) corporate philanthropy. It also aligns with the government's broader "Ease of Doing Business" agenda. Businesses are now expected to recalibrate their CSR strategies, focusing on longer-term initiatives with clearer impact assessment metrics. The MCA next steps could include further expansion of eligible activities under Schedule VII, possibly integrating more climate-related projects. Companies and implementing agencies will be closely watching for further clarifications, especially concerning the digital portal for project registration, as the government continues to refine the regulatory landscape for corporate social impact.