Social Stock Exchange (SSE) would soon be functioning in India, with an increase in funding possible amidst times of Covid-19 pandemic.
Crux of the Matter
Social Stock Exchange
India would soon have its SSE in operation which would be housed in the Bombay Stock Exchange (BSE) and/or the National Stock Exchange (NSE). The step would allow Non-Governmental Organizations (NGOs) and other for-profit and Not-For-Profit Organizations (NPOs) to enlist on the financial market, which would help in funding social-welfare through “equity, debt, grants, or performance-linked payments”.
SSE’s Key Features
A working committee has been appointed to facilitate the funding and make the whole process easy. The smaller NPOs would be aided by mechanisms like the “Social Venture Funds”. Reporting to measure the social impact of the organizations would be done to increase transparency between the investors and the organization. Initially, a self-reporting of the data would be done.
The working committee also suggested the formation of a “capacity-building unit”, which would aid the smaller NPOs and NGOs in their reporting initially. Moreover, the Zero-Coupon-Zero Principal (ZCZP) would be available for investors, where funding would be done through bonds, for which the company would not be liable to pay the interest or the principal amount. Essentially, the ZCZP would operate like a donation, albeit at enhanced transparency and visibility.
A Look At Some Troubles With NGOs In The Past
Several organizations functioning inside India faced troubles for not complying with the government’s legalities.
Rajiv Gandhi Foundation was established in 1991 with an aim to aid the poor and the marginalized. The foundation is headed by Sonia Gandhi and other Congress leaders. Recently, the BJP government released documents showing the transfer of funds from the PMNRF to the RGF.
The Prime Minister’s National Relief Fund (PMNRF) is an organization funded by the citizens and organizations, and aims to help people during disasters. In the letter, BJP President J P Nadda claimed that the people’s money was transferred to an organization owned by a single party.
Amnesty International is an NGO based in London and works across the world to defend fundamental human rights. The organization opposes Death Penalty and opposed the execution of Ajmal Kasab, Yakub Memon, and Afzal Guru.
In 2018, its Bengaluru office was raided by the Enforcement Agency over alleged violation of the Foreign Contribution (Regulation) Act (FCRA). In 2019, the same branch was raided along with its Delhi office over the alleged violation of the FCRA.
Open Society Foundation
George Soros is an American-Hungarian billionaire who founded the “Open Society Foundation” to promote social welfare. In 2020, it was placed under the “watchlist” of foundations not registered under the FCRA by the Indian government over alleged violations of the norms.
Recently, Soros announced a $1 billion fund for his Open Society University Network (OSUN), which would tackle “would-be and actual dictators” and “increasing nationalism”, particularly in the US and India. He also declared to act against India’s Citizenship (Amendment) Act, 2019.
- Global Campaign for Education is an international coalition of non-governmental organizations, working to promote children’s and adult education through research and advocacy. It was initiated by Nobel laureate Kailash Satyarthi.
- The Ahmedabad Stock Exchange (ASE) is the second oldest exchange of India located in the city of Ahmedabad in the Western part of the country. It is recognised by Securities Contract (Regulations) Act, 1956 as a permanent stock exchange. In April 2018, the SEBI permitted the Ahmedabad stock exchange to exit the stock exchange business.
- The Sustainable Stock Exchanges (SSE) is a project of the United Nations. The SSE provides a multi-stakeholder learning platform for stock exchanges, investors, regulators, and companies.
- Moneycontrol – Launch of Social Stock Exchange may mark a new chapter in impact financing in India
- The Quint – At Davos, George Soros Attacks PM Modi’s ‘Frightening’ Nationalism
- Reuters – Amnesty India says raid, frozen accounts aimed at silencing government critics
- Firstpost – Kasab execution cruel, inhuman: Amnesty International
- NDTV – “PM Relief Fund Diverted To Rajiv Gandhi Foundation, Brazen Fraud”: BJP