CSR and government schemes: working together

CSR and government schemes can work well together, as long as the company’s CSR stays its own project. The Ministry of Corporate Affairs (MCA) says CSR “should not be interpreted as a source of financing the resource gaps in Government Schemes”, although a company may run similar activities independently, and work a company must do under another law never counts as CSR. Within those rules, aligning CSR with programmes such as the Aspirational Districts Programme, the Jal Jeevan Mission or the government’s school and anganwadi initiatives can give a project more reach and a better chance of lasting.

This guide is for CSR teams and the NGOs that work with them. It covers what the law and the MCA’s FAQs say, the routes by which CSR can meet government directly, convergence with schemes, working with district administrations and panchayats, a checklist and the common mistakes.

What the law and the FAQs say

Three points set the boundaries.

CSR isn’t a top-up for scheme budgets. FAQ 3.17 of the MCA’s CSR FAQs (General Circular 14/2021) answers the question “Can CSR funds be utilised to fund Government schemes?” It says the aim of the CSR law is to involve companies as partners in social development, bringing “corporate innovations and management skills” to the delivery of public goods. So CSR shouldn’t be read as a way to finance gaps in government schemes. But the board “may undertake similar activities independently”, subject to the CSR Rules.

Statutory obligations never count.

If a condition attached to a company’s licence or environmental clearance requires it to plant trees around its plant, that planting isn’t CSR, however green it is. The same goes for any other work the law already requires of the company. See what doesn’t count as CSR.

The government doesn’t direct CSR. FAQ 2.4 says the government “has no direct role in the approval and implementation” of a company’s CSR projects, and the government said in February 2026 that the CSR framework has no provision for allocating CSR funds. A request from an official is a request, not an obligation; the board decides.

The FAQs are the MCA’s reading of the law rather than law, but companies and their auditors rely on them.

Where CSR can meet government directly

The CSR framework does allow some money to go straight to government bodies and funds, through set routes:

A payment into a government department’s own account doesn’t fit any of these routes unless the body receiving it is an eligible implementing agency or a listed fund. See CSR for veterans, sports and government funds for the funds.

Convergence: working alongside schemes

Convergence means designing a CSR project to work with a government programme in the same place: doing something the scheme doesn’t fund or reach, strengthening how it is delivered, or creating an asset that the government will then run. Done well, it brings real benefits:

• Reach. Government systems reach every village; a CSR pilot that works can be taken up across a district.
• Lasting change. When a panchayat or department takes over running costs, the benefit outlives the grant.
• Better targeting. Scheme data shows where needs are greatest and gives you indicators to measure against.
• No duplication. Nobody pays twice for the same thing.

Aspirational districts and blocks

NITI Aayog’s Aspirational Districts Programme, launched in January 2018, tracks 49 indicators in five areas: health and nutrition, education, agriculture and water resources, financial inclusion and skill development, and basic infrastructure. Progress is published on the Champions of Change dashboard. As of October 2026, NITI Aayog’s programme page puts the number of districts at 117. The Aspirational Blocks Programme, launched in January 2023, covers 513 blocks in 331 districts, with 39 indicators. Both rest on convergence of central and state schemes, collaboration and competition between districts, and NITI Aayog notes the role of development partners.

CSR spending in aspirational districts rose from ₹651.43 crore in 2020-21 to ₹1,046.43 crore in 2021-22 and ₹1,402.89 crore in 2022-23, according to MCA data reported in December 2024. Listed companies can also report CSR projects in aspirational districts in their sustainability report, as a voluntary item. For a CSR team, the programme’s indicators make ready-made targets; for an NGO working in these districts, they are a strong case for funding.

Drinking water: the Jal Jeevan Mission

The Jal Jeevan Mission’s operational guidelines, from the Ministry of Jal Shakti, list CSR funds among the sources for “financial convergence” and count business and industry with CSR funds among the mission’s sector partners, who can help with staff support, campaigns, training, technology and monitoring. Planning happens village by village, with the gram panchayat or its water and sanitation committee (the Paani Samiti) preparing a village action plan. A company or its NGO partner can support that committee, protect water sources or test water quality as its own project, in line with the village plan.

Schools: Vidyanjali

The Ministry of Education’s Vidyanjali portal connects volunteers, companies and NGOs with government and government-aided schools that list what they need. NGOs register with their NGO Darpan ID, and companies with documents such as their PAN. It offers two ways for CSR to take part, CSR Bulk Engagement across many schools and an Adopt-a-School model, and registrations are approved by the state or union territory. In the year to August 2026, 1,126 CSR organisations, NGOs and institutions joined the portal. Remember that CSR must be spent in money: a company can buy equipment for a school as CSR spending, but it can’t count its own products at a notional value (FAQ 3.12).

Anganwadis: Mission Saksham Anganwadi and Poshan 2.0

The Ministry of Women and Child Development’s guidelines for Mission Saksham Anganwadi and Poshan 2.0 let states, at their discretion, involve companies and CSR funds in building anganwadi centres, on a “pro bono basis”, and in funding infrastructure such as toilets, rainwater harvesting and drinking water, or items such as early childhood education materials, furniture and kitchen equipment. That means working through the state’s or district’s women and child development department, with its written agreement.

Working with district administrations and panchayats

1. Start from local plans and data: the district’s aspirational indicators, scheme dashboards, the village action plan for water, and the needs the panchayat itself has identified. See needs assessment.
2. Meet the right people early: the District Collector’s office, the relevant department and the gram panchayat, and the community through its own groups.
3. Agree roles in writing: what the company and its NGO partner will do, what the government will do, the timeline, who maintains assets and how data is shared.
4. Plan the handover from the start: train the people who will run things, and agree who pays running costs after the grant.
5. Expect officials to move. Record agreements, and build relationships at more than one level.
6. Keep it non-partisan. Contributions to political parties are never CSR, and projects shouldn’t be presented as any party’s achievement.

A checklist for a convergence project

• Is it in the company’s annual action plan as its own project, with a Schedule VII item and a budget?
• Is the money spent by the company, by an eligible implementing agency with a CSR registration number, or paid into a listed Schedule VII fund?
• Does it add something the scheme doesn’t fund or reach?
• Is it free of any obligation the company has under another law?
• Who will own and maintain any asset, and is that a public authority or another eligible holder?
• Is there a written understanding with the department or panchayat?
• Has the company taken advice where the line isn’t clear?

For more on working with other funders, see collaborating on CSR.

Common mistakes

• Paying into a department’s account outside the routes the CSR Rules allow.
• Topping up a scheme’s budget, or paying salaries the government already funds.
• Counting work required by law, such as clearance conditions, as CSR.
• Contributing to a relief fund that isn’t listed in Schedule VII.
• Building an asset with no agreed owner or upkeep.
• Treating an official’s request as a duty: the board decides the company’s CSR.