In a more creative step towards economic and social reformation of our country, the maiden budget of FM Smt Nirmala Sitharaman has proposed creation of a Social Stock Exchange to list charity, voluntary and welfare organizations in the country and help them raise funds in the form of equity or debt or as units in a way similar to mutual funds.
This historic step is intended to take capital markets closer to the masses and meet the various social welfare objectives related to inclusive growth and financial inclusion. India is one of the largest economy to home most number of social enterprises and charitable organizations who contribute a lot to various social and financial developments mostly in the fields of education, health, sanitation, housing, poverty alleviation, water conservation etc.
Social Stock Exchanges (SSE) already exist in Canada, Singapore, UK, Jamaica, South Africa, Brazil and Kenya.
With compulsory CSR contributions from profits and ease of raising funds through an electronic platform, charitable entities, voluntary and social NGOs who are registered and complies with applicable laws, can raise the funds needed for their activities much easily and also it makes the tracking of inflow and outflow of funds transparent.
If executed well, this will be a path-breaking step from the Indian government.
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