India’s landmark corporate law reform in 2013 contained a pioneering attempt to mandate corporate spending of 2 percent of average profits on corporate social responsibility (CSR) initiatives. This chapter explores a puzzle: The CSR requirement could have been written as a CSR tax rather than a CSR spending requirement, so why did the government choose the latter, more heterodox, option? The analysis suggests that the motivation for the reforms reflects a blend of political optics and state capacity or efficiency considerations informed by historical experiences with market-oriented reforms. On the efficiency and state capacity front, the Indian state might not have been as well placed to enforce a CSR tax as Indian firms might have been able to manage a CSR spending requirement in 2013. On the political optics side there was a prevailing perception that the liberalization had primarily benefited only a very small sliver of the country. If corporations were engaged in CSR then it might look like the gains from economic liberalization were beginning to find their way from India Inc. to the general citizenry. This blended account provides interesting insights about this rather unique set of reforms and subsequent developments.