Our Budget Should Address the Hardships of our Social Sector

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.