Social stock exchange idea highlights India’s move away from foreign aid.

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Proposal could provide cheaper funding for charities, says finance minister Nirmala Sitharaman, but critics warn against greater government control of welfare projects.

Plans from finance minister Nirmala Sitharaman mark a new focus on sustainability and social impact in business. Photograph: Hindustan Times/SIPA USA/PA Images
▼ India’s finance minister, Nirmala Sitharaman, has called for the creation of a “social stock exchange”, allowing ethically minded investors to buy stakes in social enterprises, volunteer groups and welfare organisations.
The proposal would be a radical experiment in a country characterised by stark inequality and rapid economic growth.
If created, the exchange could provide new and cheaper sources of financing for social welfare projects, while showcasing India’s independence from foreign aid as it seeks to enhance its position on the world stage.
“It is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion,” Sitharaman said in her maiden budget speech on Friday.
Sitharaman’s plan for a social stock exchange marks a new focus on sustainability and social impact in business, said Amit Bhatia, CEO of the Global Steering Group for Impact Investment. “Before, the main objective of investors was to maximise return,” Bhatia said. “In the past few years, impact funds have multiplied and every major private equity firm is jumping in.”
According to Bhatia, such “impact” assets have risen from $0 to $22tn (£17tn) in the past two decades, and almost all the major S&P 500 companies are doing some sort of sustainability reporting.
“It’s an unstoppable trend,” he said. “We have found a higher purpose for capital.” (▪ ▪ ▪)

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asr335704

I am yet to fully understand this idea and how it works. But experimenting with any new idea is not a bad thing. Until we try new ideas, we never know whether the idea will work or not.

raviedu

This govt comes up with many new ideas, much appreciated.

But the issue with execution. That is the problem in our country. Moreover, it is difficult to control.