The Ministry of Corporate Affairs (MCA) has amended Schedule VII of the Companies Act, 2013, allowing companies to allocate up to 10% of their annual CSR budgets to not-for-profit organisations (NPOs) registered on the Social Stock Exchange (SSE) through Zero Coupon Zero Principal (ZCZP) instruments. This amendment, effective immediately as of May 27, 2026, aims to enhance social financing in India by providing a regulated channel for corporates to support impact-focused organisations.
The Social Stock Exchange, a platform designed to connect social enterprises and NPOs with funding sources, differs from conventional stock exchanges by focusing on measurable social impact rather than financial returns. The National Stock Exchange (NSE) has indicated that this policy change could scale up social financing by enhancing transparency, credibility, and the reach of funding within the social sector.
The concept of a Social Stock Exchange was first introduced by Finance Minister Nirmala Sitharaman during the 2019 Budget, aiming to bring capital markets closer to the masses and promote inclusive growth and financial inclusion. With the new amendment, companies can now incorporate SSE-based contributions into their CSR programs through a structured and regulated mechanism.
“The provision would enable corporates to channel CSR funds through a transparent, regulated and impact-driven platform, helping improve trust, accountability and access to capital for social enterprises.”
Sriram Krishnan, Chief Business Development Officer at NSE
Sriram Krishnan, Chief Business Development Officer at NSE, described the amendment as a significant development for India's social sector, enabling corporates to channel CSR funds through a transparent, regulated, and impact-driven platform. This move is expected to improve trust, accountability, and access to capital for social enterprises.
The MCA's notification is expected to strengthen governance and disclosure standards, encourage outcome-oriented philanthropy, and foster greater trust across the social impact landscape.
Background
The idea of a Social Stock Exchange was first outlined by Finance Minister Nirmala Sitharaman during the 2019 Budget, with the aim of bringing capital markets closer to the masses while advancing inclusive growth and financial inclusion.
As the amendment takes effect, stakeholders will be watching how this impacts the funding landscape for NPOs and social enterprises, potentially setting a precedent for similar initiatives globally.
