REVOLUTIONIZING SOCIAL SECTOR FINANCING IN INDIA: A COMPREHENSIVE ANALYSIS OF THE FRAMEWORK FOR SOCIAL STOCK EXCHANGE IN INDIA

Author – Prakash Chandra Dhundhwal, Student at National Law University, Jodhpur.

Best Citation – Prakash Chandra Dhundhwal, REVOLUTIONIZING SOCIAL SECTOR FINANCING IN INDIA: A COMPREHENSIVE ANALYSIS OF THE FRAMEWORK FOR SOCIAL STOCK EXCHANGE IN INDIA, ILE Competition and Company Law Journal, 1 (1) of 2023, Pg. 01-09, ISBN – 978-81-961120-6-6.

ABSTRACT

The social sector in India plays a vital role in serving the underprivileged sections of society. India is home to millions of social organisations working across various sectors to create positive impact at the grassroots level. India’s rapid economic growth coupled with the growing global trend for socially and environmentally responsible business practices has brought about a significant transformation in the social sector funding in the country, through philanthropic grants as well as new-age instruments such as impact investing.  However, despite the exponential growth in social financing, the social sector still faces various hurdles and challenges relating to access to finance. Thus, the Ministry of Finance has proposed to set up Social Stock Exchange (SSE), a funding platform for social enterprises and non-profit organisations, under the regulatory ambit of the Securities and Exchange Board of India. In this article, the author attempts to comprehensively discuss and evaluate the framework notified by SEBI for setting up the SSE in the backdrop of India’s social sector landscape. The author explores the evolution of the concept of SSE and its need in the Indian scenario, followed by a detailed analysis of the framework and funding instruments notified by the SEBI. Further, the article, in addition to examining shortcomings of the Indian model of the SSE, analyses the features that set it apart from its global counterparts. Finally, the author concludes the article by suggesting that whether the SSE will prove as a moonshot for the social sector or not is a question of time, but it is certainly a landmark step.

Keywords: Social Stock Exchange, SEBI, Alternative Investment Fund, SSE, Social Sector