CSR norm tweak to boost social stock exchanges

Analysts said the move could provide a much-needed boost to social stock exchanges in India, which have struggled to attract sufficient investors. Companies spent ₹34,909 crore on CSR activities in 2023-24, according to the latest official data.

A social stock exchange operates as a dedicated segment of an existing bourse such as BSE or NSE, enabling social enterprises to raise funds through market-linked instruments. Eligible entities include both not-for-profit organisations and for-profit social enterprises.

In a notification, the ministry defined a zero coupon zero principal instrument as a security issued by a not-for-profit organisation registered with a social stock exchange under Securities and Exchange Board of India regulations.

Under the Companies (Corporate Social Responsibility Policy) Amendment Rules, 2026, companies subscribing to such instruments will be exempt from carrying out impact assessments for projects funded through them. The rules came into effect on Friday.

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“For years the social stock exchange has had one basic problem, which is that there were never enough buyers. This amendment goes some way to fixing that,” said Manpreet Singh, partner and sustainability practice leader at Grant Thornton Bharat.
The move also changes the conversation in the boardroom, he said. “Until now the question was which NGO to write a cheque to. It now becomes how to build a CSR portfolio that is properly vetted and tracked,” Singh said. For companies, the notification “not only enhances transparency, accountability and impact measurement in CSR initiatives, but also enables more strategic alignment of social investments with ESG and sustainability objectives”, said Sandeepp Jhunjhunwala, partner at Nangia Global Advisors.The move, Jhunjhunwala added, is expected to “encourage companies to participate in outcome-oriented development projects through a regulated and market-linked mechanism”.

The move “helps in furtherance of a transparent and credible mode of funding CSR projects by the companies and enable social enterprises to access a wider pool of capital”, said Anshul Jain, partner-regulatory at PwC India.