CSR for education, skills and livelihoods

Yes: CSR can fund schools, scholarships, digital learning, special education, vocational training and livelihood projects, because item (ii) of Schedule VII covers education, skills and livelihoods. It is the area where Indian companies spend the most CSR money by far.

Schedule VII of the Companies Act, 2013 sets out the thirteen areas CSR money can go to; Schedule VII at a glance lists them all. This guide, for CSR teams and for NGOs, schools and training providers, covers what item (ii) says, which projects clearly qualify, the grey areas the Ministry of Corporate Affairs (MCA) has settled, what never counts, and how to measure learning, placement and income rather than activity.

What item (ii) says

In plain words, the item has three strands:

• Education of every kind, from early childhood and school to adult literacy and higher education. “Special education” means education for children and adults with disabilities.
• Vocational skills that improve people’s chances of a job, with a stress on children, women, older people and people with disabilities.
• Livelihood enhancement projects that raise incomes: farm and non-farm work, self-help groups (SHGs) and small enterprises.

Where the law is brief, the MCA’s frequently asked questions on CSR (General Circular 14/2021, 25 August 2021) give the Ministry’s reading. They aren’t law, but companies and auditors follow them; this guide cites them as “FAQ” and a number. FAQ 3.13 says Schedule VII “must be interpreted liberally to capture the essence of the subjects”, so a coding club or a financial literacy course for women can sit within education or skills even though neither is named.

How much CSR goes to education, skills and livelihoods

The government reports CSR spending under about 29 “development sectors”, the National CSR Portal’s reporting categories, which don’t match Schedule VII items exactly. Four of them correspond to item (ii).

Together these lines came to ₹16,287.78 crore in 2023-24, nearly half of the ₹34,908.75 crore companies spent on CSR. Education alone rose from 24.8% of all CSR in 2021-22 to 34.8% (PIB, 25 March 2026). With so much money in one area, the question for most companies isn’t whether education counts, but whether their education spending changes anything. See India’s CSR in numbers for how to read the data.

Projects that clearly qualify

School toilets and drinking water fit item (i) as well, and girls’ education fits item (iii) on gender equality. Pick one item for each project, by its main purpose, and use it in every report.

Grey areas, and how the FAQs settle them

Scholarships and schools that employees’ children use

The CSR Rules exclude activities that benefit the company’s employees (Rule 2(1)(d)(iv)), and FAQ 4.2 explains where the line falls: an activity “designed exclusively for the benefit of employees” doesn’t count, but one designed for the public at large still counts when employees and their families are “incidental beneficiaries”. A scholarship open to every girl in the district’s government schools qualifies even if a few winners are employees’ daughters. A scholarship scheme only for employees’ children doesn’t.

Training that feeds the company’s own workforce

No FAQ deals with this directly, so apply the exclusions. Training the company’s own staff benefits employees. A recruitment academy that trains people for the company’s own vacancies is part of its normal course of business, which Rule 2(1)(d)(i) excludes. A course that is open to anyone, prepares people for jobs across a sector and places them with many employers is CSR, even if the company hires some graduates. The safest designs keep selection with the training partner and put trainees under no obligation to join the funder.

Teachers’ salaries

FAQ 3.2 says the salaries of “school teachers or other staff” on an education project are project costs, not the company’s administrative overheads. But FAQ 3.17 warns that CSR “should not be interpreted as a source of financing the resource gaps in Government Schemes”, while letting a board run similar activities independently. So paying the remedial teachers your own programme hires is fine. Taking over sanctioned teacher posts the state hasn’t filled is the kind of gap-filling the FAQ warns against. See CSR and government schemes.

Classrooms, labs and devices

Buildings, labs, furniture and equipment are capital assets. Rule 7(4) says they must be held by a Section 8 company, registered public trust or registered society with charitable objects and a CSR registration number, by the project’s beneficiaries as self-help groups, collectives or entities, or by a public authority, such as the state education department for a government school. Never by the company. Stamp duty and registration fees on a transfer count as CSR spending (FAQ 3.6). The Rules don’t say how to treat devices handed to individual students; our guide to capital assets in CSR explains the question and how to record your answer.

Branding

FAQ 4.3 says brand building “as a collateral benefit does not vitiate the spirit of CSR”, as long as the work runs as a programme rather than a one-off event. The company’s name on scholarship certificates or a school building is fine. Paying for a branded quiz show is sponsorship.

Endowments

A contribution to the corpus of any entity, such as an endowment for a university chair or a school trust’s investment fund, “is not an admissible CSR expenditure” since 22 January 2021 (FAQ 3.5). Fund the programme, not the endowment.

What doesn’t count

The full list of exclusions is in our guide to what doesn’t count as CSR. In education and skills, the common ones are:

• Staff training and staff benefits, including courses for employees and scholarships only for their children.
• Training another law already requires, such as engaging the apprentices the company is obliged to take on under the Apprentices Act, 1961, or the safety training its own workers need (Rule 2(1)(d)(vi)).
• Customer education that sells the company’s products. If a bank’s or a fintech’s “financial literacy” sessions work as customer acquisition, they are normal business.
• Employee volunteers’ teaching hours, which “cannot be monetized” (FAQ 3.18). Encourage volunteering, but run it alongside the obligation: see employee volunteering.
• The company’s own products at a notional value, such as its tablets or textbooks from stock (FAQ 3.12). Buying supplies for a project counts.
• Schools or courses outside India.

Good practice: need, partners and what to measure

Start from the data

Several public data sources help you find where the need is. UDISE+, the Ministry of Education’s school data system, reports enrolment, teachers and facilities school by school. The government’s national learning survey, PARAKH Rashtriya Sarvekshan (formerly the National Achievement Survey), reports what children in different grades can do, and ASER, the household survey of children’s learning that the NGO Pratham runs, tests reading and arithmetic in villages. For skills and jobs, the Periodic Labour Force Survey shows who is working and in what. Our guide to needs assessment explains how to combine data like this with what families, teachers and employers tell you.

Work with the school system

Lasting education CSR usually works with government schools, through the state education department, the block education office and each school’s management committee. Agree permissions in writing before you start. Align with national goals, such as the push under NIPUN Bharat for every child to read and do basic maths by the end of Grade 3, without paying the scheme’s own costs. For skills, choose courses with recognised certification and real demand from local employers, and for livelihoods, build on SHGs and producer groups that already exist.

Measure learning, placement and income

Report numbers that fall as well as numbers that rise: drop-outs and people who leave jobs early are what tell you a programme needs to change. See choosing indicators and baselines and evaluation.

For NGOs

• Show learning or income data, not just activity. Simple reading and arithmetic tests at the start and end of a year are more persuasive than photographs of classrooms.
• Get permissions in writing for work in government schools, and have a child protection policy that covers staff and volunteers (see child protection and safeguarding).
• Track placements honestly, with trainees’ consent, and keep employer confirmations.
• Check your eligibility: a company can fund only implementing agencies with the right legal form, the income-tax registrations the Rules require and a CSR registration number, and an independent NGO, one not set up by a company or a government, also needs three years’ record of similar work. See how NGOs can get CSR funding.
• Plan for volunteers carefully. Students and employee volunteers can add a lot, but their time isn’t CSR spending. Our guide to college volunteering covers safe drives with student groups.

The Academy’s CSR Essentials course covers Schedule VII in depth, and The SDGs and India covers the education goal and its targets.