MP introduces 'Social Impact Bonds'

Bhopal: The Madhya Pradesh government unveiled the Social Impact Bonds (SIBs) while presenting its fiscal blueprint to the State Assembly on Wednesday.

An allocation of Rs 20 crore has been earmarked in the Budget to fund this initiative, with the bonds slated for introduction within a month.

SIBs operate as an accord with governmental entities, wherein funds are allocated towards enhancing social outcomes.

If predefined goals fail to materialise, investors forfeit their returns and receive no reimbursement for their initial investment.

"The state plans to introduce social impact bonds as a pioneering financial instrument. Through these bonds, social service providers will secure funding from risk investors to deliver services to the intended beneficiaries. The Social Stock Exchange, operated by the National Stock Exchange, serves as a unified platform to facilitate this entire process," Finance Minister Jagdish Devda said in his Budget speech.

However, much detail is not available. In the context of India, SIBs are emerging as innovative financial instruments supporting social endeavours. They invite investors to finance initiatives where returns hinge upon the fulfilment of established objectives.

The upcoming SIBs of Madhya Pradesh are set to be unveiled through the Social Stock Exchange (SSE) segment of the National Stock Exchange (NSE).