+
MCA Expands CSR Scope To Include Zero Coupon Zero Principal Instrument
ECONOMY & POLICY

MCA Expands CSR Scope To Include Zero Coupon Zero Principal Instrument

The Ministry of Corporate Affairs (MCA) has widened the ambit of Schedule VII of the Companies Act, 2013, by introducing a new item, number xiii, to permit subscription to zero-coupon zero-principal instruments on the Social Stock Exchange. The amendment, notified on 27 May 2026 through Gazette Notification nos. G.S.R. 415(E) and G.S.R. 416(E) seek to facilitate corporate social responsibility implementation through a regulated market mechanism. The development was presented as aligned with the government vision of Viksit Bharat.

The changes introduce definitions of Not-for-Profit Organisation and Zero Coupon Zero Principal Instrument in Rule 2 and set out criteria for implementation under a new Rule 4A. Not-for-Profit Organisation (NPO) and Zero Coupon Zero Principal Instrument (ZCZPI) are now referenced in the Companies (Corporate Social Responsibility Policy) Rules, 2014, and the responsibility for project execution and project evaluation is placed on the NPO, raising funds through the instrument. The amendments specify governance and compliance conditions for entities seeking to issue ZCZPIs.

The amendment is intended to provide significant ease of compliance for companies while enabling NPOs to mobilise funds for public welfare projects in a transparent and regulated manner. NPOs will be able to issue ZCZPIs on the Social Stock Exchange in accordance with Securities and Exchange Board of India regulations and applicable listing requirements. The measure is expected to broaden the financing options available to charitable entities without altering the core CSR obligations of companies.

Expenditure by companies mandated to spend on CSR for such instruments shall not exceed 10 per cent of the total CSR expenditure for that financial year. The legal framework remains anchored in Section 135 of the Companies Act, 2013, Schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The relevant amendment notifications have been placed on the Ministry of Corporate Affairs website for reference.

The Ministry of Corporate Affairs (MCA) has widened the ambit of Schedule VII of the Companies Act, 2013, by introducing a new item, number xiii, to permit subscription to zero-coupon zero-principal instruments on the Social Stock Exchange. The amendment, notified on 27 May 2026 through Gazette Notification nos. G.S.R. 415(E) and G.S.R. 416(E) seek to facilitate corporate social responsibility implementation through a regulated market mechanism. The development was presented as aligned with the government vision of Viksit Bharat. The changes introduce definitions of Not-for-Profit Organisation and Zero Coupon Zero Principal Instrument in Rule 2 and set out criteria for implementation under a new Rule 4A. Not-for-Profit Organisation (NPO) and Zero Coupon Zero Principal Instrument (ZCZPI) are now referenced in the Companies (Corporate Social Responsibility Policy) Rules, 2014, and the responsibility for project execution and project evaluation is placed on the NPO, raising funds through the instrument. The amendments specify governance and compliance conditions for entities seeking to issue ZCZPIs. The amendment is intended to provide significant ease of compliance for companies while enabling NPOs to mobilise funds for public welfare projects in a transparent and regulated manner. NPOs will be able to issue ZCZPIs on the Social Stock Exchange in accordance with Securities and Exchange Board of India regulations and applicable listing requirements. The measure is expected to broaden the financing options available to charitable entities without altering the core CSR obligations of companies. Expenditure by companies mandated to spend on CSR for such instruments shall not exceed 10 per cent of the total CSR expenditure for that financial year. The legal framework remains anchored in Section 135 of the Companies Act, 2013, Schedule VII of the Act and the Companies (Corporate Social Responsibility Policy) Rules, 2014. The relevant amendment notifications have been placed on the Ministry of Corporate Affairs website for reference.

Related Stories

Gold Stories

Next Story
Infrastructure Urban

Assam Gets Approval For 350,000 PMAY Homes

Assam Chief Minister Himanta Biswa Sarma met Union Agriculture Minister Shivraj Singh Chouhan in New Delhi, where the minister handed an approval document for 310,000 new homes under the Pradhan Mantri Awas Yojana. The chief minister subsequently posted on X expressing gratitude and noting that the minister had formally handed approval for 380,000 homes as well. The release and the social media post contained varying figures, with broader references to 350,000 homes reported in some summaries. The approvals carry central assistance equivalent to Rs 50 billion (bn), corresponding to the five th..

Next Story
Infrastructure Urban

KPIGreen Achieves Highest Energised Capacity of 630+ MW DC

KPI Green Energy energised more than 630 MW DC of capacity in the June to August quarter, marking the highest quarterly addition in the company's history. The capacity was brought online across its Independent Power Producer (IPP) and Engineering, Procurement and Construction (EPC) businesses. The company said the achievement reflected the scale, speed and consistency of its project execution engine. The firm described the quarter as a material operational milestone since its founding. The milestone covers a diversified mix of IPP assets and projects executed under the EPC vertical, spanning u..

Next Story
Infrastructure Energy

Adani Energy Solutions Wins Rs 47 bn Maharashtra Transmission Project

Adani Energy Solutions has won a transmission contract in Maharashtra valued at Rs 47 billion (Rs 47 bn) to evacuate 4,500 megawatt (MW) of renewable and storage power. The company informed exchanges that the project will facilitate pumped storage potential near Satara and strengthen the inter-regional corridor between the Western and Southern grids. The award follows a competitive bidding process and will support renewable energy evacuation to major load centres in the state. The scope includes establishment of a 765/400 kV substation at Satara, construction of a Kolhapur-Satara 765 kV double..

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

SPECIAL OFFER
QR Code