Our Budget Should Address the Hardships of our Social Sector

Livemint     12th January 2021     Save    
QEP Pocket Notes

Context: The government through budget must make capital-raising easier for non-profit and other organizations that provide support to India’s underprivileged population.

Challenges faced by underprivileged population (due to COVID-19): income has declined, unemployment is rampant, and family savings have been depleted.

Suggestions for improving the Social Sector in India:

  • Make it easier for social enterprises to raise fresh capital: This may include:
    • Incentivizing the flow of capital into existing financial vehicles like alternative investment funds.
    • Encouraging new financial tools, like impact and development bonds.
    • E.g. The Social Stock Exchange proposed in the Budget 2019, is a unique approach to social finance, covering both non-profits and impact enterprises.
    • Utilizing Impact investors: who work with a purpose-driven agenda to address the key needs of underserved population in sectors like health, education and agriculture.
  • Providing safety nets: for those social enterprises badly hit by COVID. (since many of these organizations have seen at the front line during the crisis and are essential for maintaining the mission continuity)
    • E.g. Special schemes by the government that make credit available to loss-making entities with a demonstrated track record or promising growth prospects are required.
  • Continued expansion of digital access: focusing on closing the digital divides between urban and rural India, and between men and women.
    • E.g. Prime Minister Wi-Fi Access Network Interface (PM WANI) scheme proposes to create nearly 10 million small Wi-Fi hotspots in the country, anchored by small retailers in low-income areas.
    • Bring more government services onto digital platforms, including the adoption of mobile-first methods. (building blocks of which are provided by Jan Dhan-Aadhar mobile trinity and India Stack)
    • Integrate existing government services into digital infrastructure, including legal recourse (e.g. through online dispute resolution) and public primary healthcare (e.g. through online medical consultations).

Conclusion: A clear focus on supporting the most vulnerable sections of our population will be important to steer India out of the economic turbulence created by the pandemic and into calmer waters.

QEP Pocket Notes