Corporate Laws (Amendment) Bill, 2026: Balancing Ease of Doing Business with Social Accountability

The Government of India has introduced the Corporate Laws (Amendment) Bill, 2026, proposing significant modifications to Section 135 of the Companies Act, 2013. The most notable change is the proposal to increase the net profit threshold for mandatory Corporate Social Responsibility (CSR) spending from ₹5 crore to ₹10 crore. Additionally, the Bill seeks to grant the Central Government the authority to exempt specific classes of companies from CSR obligations.

From a policy perspective, this move is seen as a step toward enhancing the 'Ease of Doing Business' in India. By doubling the threshold, the government aims to reduce the regulatory and compliance burden on small and medium-sized enterprises (SMEs). Proponents argue that these firms often lack the administrative machinery to implement and monitor CSR projects effectively, and the capital saved could be better utilized for business expansion and job creation.

However, the Bill has sparked a debate regarding corporate social accountability. India was the first country to mandate CSR by law, viewing it as a tool for inclusive growth. Critics argue that raising the threshold might significantly shrink the total pool of CSR funds available for the social sector, impacting NGOs and grassroots developmental projects in education, healthcare, and environmental conservation. Furthermore, the provision allowing the government to exempt certain "classes of companies" introduces an element of discretionary power, which necessitates clear guidelines to ensure transparency and prevent arbitrary decision-making.

The proposed shifts reflect a broader governance dilemma: balancing the need for a competitive, low-compliance business environment with the ethical obligation of corporations to contribute to the social good. As India strives for a $5 trillion economy, the role of the private sector in addressing socio-economic disparities remains a critical pillar of the national development agenda.