Explainer
CSR for research, innovation and incubators
Item (ix) of Schedule VII lets companies count contributions to government-funded incubators and research projects, and to public universities, IITs, national laboratories and named research bodies. Here is what qualifies, what to check and why a company’s own R&D never counts.
At a glance10 min read
- Item (ix)(a) covers contributions to incubators or R&D projects in science, technology, engineering and medicine funded by the central or a state government, a public sector undertaking or a government agency.
- Item (ix)(b) covers contributions to public-funded universities, IITs, national laboratories and named research bodies such as CSIR, ICMR, ICAR and DRDO, for research aimed at the SDGs.
- The MCA treats item (ix) contributions as a separate mode of CSR spending, alongside projects and fund contributions (FAQ 3.14).
- A company’s own R&D is part of its normal business and never counts; a temporary exception for COVID-19 vaccine, drug and device research ended after 2022-23.
- Keep results public and avoid exclusive rights for the funder, or a research grant starts to look like the company’s own R&D.
On this page
Yes: CSR can fund scientific, engineering and medical research, and the incubators that help start-ups grow, but only through the channels that item (ix) of Schedule VII names. These are government-funded incubators and research projects, and public research institutions working towards the Sustainable Development Goals (SDGs). A company’s own research never counts.
Schedule VII, the Companies Act, 2013’s list of what CSR money can be spent on, has thirteen items (Schedule VII at a glance lists them all). This guide, for CSR teams, company secretaries and the research offices of universities and laboratories, explains what item (ix) says, how it has changed, what a company must check, what doesn’t count, and how to write an agreement that keeps a research grant on the right side of the line.
What item (ix) says
This is the only place where Schedule VII names the SDGs, the 17 global goals for 2030. Our guide to CSR and the SDGs explains how to map projects to their targets.
The Ministry of Corporate Affairs’ (MCA) frequently asked questions on CSR (General Circular 14/2021, 25 August 2021), cited here as “FAQ” and a number, set out how the Ministry reads the law. FAQ 3.14 lists three modes of CSR spending: projects (the “activities route”), contributions to Schedule VII funds, and contributions under item (ix). So an item (ix) contribution is a recognised way of spending in its own right.
How the item has changed
| When | What item (ix) covered |
|---|---|
| From 1 April 2014 | Contributions to technology incubators located within academic institutions approved by the central government |
| From 11 October 2019 (G.S.R. 776(E); corrigendum G.S.R. 859(E), 19 November 2019) | Incubators funded by government or public sector undertakings, and contributions to public-funded universities, IITs, national laboratories and autonomous bodies under ICAR, ICMR, CSIR, DAE, DRDO, DST and MeitY, for research aimed at the SDGs |
| From 24 August 2020 (G.S.R. 525(E)) | Rewritten as (a) and (b): government-funded R&D projects added, along with the Department of Biotechnology, the Department of Pharmaceuticals and AYUSH |
If your CSR policy or a research agreement quotes an older version of the item, update it to the current text.
How much CSR goes to research
Not much that the data can see. The National CSR Portal’s “technology incubators” line recorded ₹8.57 crore in 2021-22 and just ₹1.91 crore in 2023-24, out of ₹34,908.75 crore of CSR that year (PIB, 25 March 2026). The portal has no separate line for contributions to research institutions, so it can’t show how much goes to item (ix) as a whole.
What a company must check
Route (a): incubators and R&D projects funded by government
The test is who funds the incubator or project: the central government, a state government, a public sector undertaking or a government agency. Ask for the sanction letter or grant agreement that shows it. Two real examples of government-funded incubators:
- Atal Incubation Centres, which NITI Aayog’s Atal Innovation Mission supports with grants of up to ₹10 crore over up to five years.
- BioNEST bioincubators, supported by the Biotechnology Industry Research Assistance Council (BIRAC), a public sector enterprise of the Department of Biotechnology.
The work must be in science, technology, engineering or medicine. Atal Incubation Centres can be hosted by companies as well as by academic institutions. If your own company hosts the incubator, or takes equity in the start-ups, CSR money paid into it starts to look like the company’s own business.
Route (b): public research institutions
Check three things, and record each in the board’s file:
- The institution is a public-funded university, an IIT, a national laboratory, an autonomous body under one of the named departments or ministries, or DRDO, ICAR, ICMR or CSIR. A private university that isn’t publicly funded doesn’t fit, though scholarships there can fit item (ii) on education.
- The research is in science, technology, engineering or medicine. Social science or policy research doesn’t fit item (ix), though it may form part of a project under another item.
- The aim is to promote the SDGs. Name the goal and the target, such as SDG target 3.3 on ending epidemics of tuberculosis and other communicable diseases.
Contributions and projects
If an institution will run a project for you, such as a training programme or a field deployment, rather than receive a contribution for its own research, it is acting as an implementing agency. Rule 4(1)(c) of the CSR Rules admits entities set up under an Act of Parliament or a state legislature, such as the IITs, but every implementing agency needs a CSR registration number from Form CSR-1 (Rule 4(2)). The Rules don’t say plainly whether an institution receiving a pure item (ix) contribution needs one, so ask for the number, and take advice if it doesn’t have one. See Form CSR-1.
What doesn’t count
- The company’s own R&D. Rule 2(1)(d)(i) excludes “activities undertaken in pursuance of normal course of business of the company”. Research in the company’s own labs, trials of its own products and development work it would do anyway aren’t CSR, even when a public institution takes part.
- Research the company effectively owns. If the funder gets exclusive rights to the results, or uses them in its own products, the grant starts to look like outsourced company R&D.
- Equity. CSR money that buys the company a stake in start-ups is an investment, not CSR.
- Endowments. An endowed chair or a contribution to an institution’s corpus “is not an admissible CSR expenditure” since 22 January 2021 (FAQ 3.5). Fund research programmes instead.
- Research outside India, at a foreign university for example.
- Branded conferences and events, which are sponsorship for marketing benefit under Rule 2(1)(d)(v).
The full list of exclusions is in what doesn’t count as CSR.
Good practice: agreements that keep research public
A research grant counts as CSR because it serves the public, not the funder. Write the agreement to show that.
| Clause | What to agree |
|---|---|
| Research question | The problem, the SDG target it serves and the expected results |
| Money | Budget, tranches against milestones and how unspent money is returned |
| Publication | Results and data published, within a reasonable time |
| Intellectual property | Owned by the institution, or licensed openly or on fair terms to all; no exclusive rights for the funder |
| Conflicts of interest | Company scientists, if involved, advise but don’t direct the work |
| Ethics | Ethics committee approval for any research with human participants |
| Reporting | Utilisation certificates, progress reports and a final report the board can rely on |
Measure what the research leads to, not just what it produces: a test validated in clinics, a crop variety adopted by farmers, a technology licensed to several manufacturers. For incubators, track start-ups supported, those still trading after three years, jobs created and the social problems their products address. Tax is a separate question: see CSR and income tax.
For universities, laboratories and incubators
- Show your status: the Act or order that set you up, or the government sanction that funds your incubator or project.
- Show the SDG link at target level, with the results you expect.
- Offer terms that protect the funder’s CSR claim: open publication and no exclusive rights.
- Report like any CSR partner: utilisation, milestones and results, on time.
- Register on Form CSR-1 if you will run CSR projects as an implementing agency.
For the exclusions and the modes of spending in more depth, take the Academy’s CSR Law in Depth course.
Questions people ask
- Can CSR funds be given to an IIT for research?
Yes. Item (ix)(b) of Schedule VII covers contributions to IITs, public-funded universities, national laboratories and named research bodies for research in science, technology, engineering and medicine aimed at the SDGs. Record the SDG target the research serves, and keep the results public rather than reserved for the company.
- Can CSR fund research at a private university?
Not under item (ix)(b), which names public-funded universities, unless the university is publicly funded. A private university can still receive CSR money for activities under other items, such as scholarships under item (ii), through an eligible route.
- Can a company spend CSR money on its own R&D?
No. Activities in the company’s normal course of business are excluded by Rule 2(1)(d)(i) of the CSR Rules, and that includes its own research and product trials. A temporary exception for COVID-19 vaccine, drug and device research covered 2020-21 to 2022-23 only.
- What was the COVID-19 R&D exception in the CSR Rules?
For 2020-21, 2021-22 and 2022-23, companies that research new vaccines, drugs and medical devices as part of their business could count COVID-19 research as CSR, if they did it with an institution named in item (ix) and disclosed it separately in the annual report on CSR. The MCA’s FAQ 4.1 confirms it ran until 2022-23, and it has ended.
- Does funding a start-up incubator count as CSR?
Yes, if the incubator is funded by the central or a state government, a public sector undertaking or a government agency, and works in science, technology, engineering or medicine, as item (ix)(a) requires. Atal Incubation Centres and BIRAC’s BioNEST incubators are examples. The company mustn’t take equity in the start-ups through its CSR.
- Does social science research count under item (ix)?
No. Item (ix) is limited to research in science, technology, engineering and medicine. Research on, say, education or poverty can still be part of a project under another Schedule VII item, such as a needs assessment for an education programme.
Sources
- The Companies Act, 2013 (Section 135 and Schedule VII) · India Code, Ministry of Law and Justice
- Frequently asked questions on CSR (General Circular 14/2021) · Ministry of Corporate Affairs
- Schedule VII, consolidated with amendment notes · CAIRR (ca2013.com)
- Atal Incubation Centres · Atal Innovation Mission, NITI Aayog
- BioNEST: bioincubators nurturing entrepreneurship · Biotechnology Industry Research Assistance Council
- Development sector-wise CSR spending, 2021-22 to 2023-24 (25 March 2026) · Press Information Bureau
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