What is Social Stock Exchange? How will you benefit?

Budget 2019: In her first Budget Speech on Friday, Finance Minister Nirmala Sitharaman proposed the creation of a social stock exchange. The Finance Minister said it is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion. 

“I propose to initiate steps towards creating an electronic fundraising platform – a social stock exchange - under the regulatory ambit of Securities and Exchange Board of India (SEBI) for listing social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund”.

Who will benefit

Social stock exchange will help social service organisations - working in areas like health, agriculture, skill development etc - to raise funds to carry out their works. This will operate on the lines of the stock exchanges. It will help volunteer or social service organisations get listed and raise funds for their works. 

The Finance Minister further said it is important to get retail investors to invest in treasury bills and securities issued by the Government. Efforts made by the Reserve Bank will need to be supplemented with further institutional development using stock exchanges. For this purpose, inter-operability of RBI depositories and SEBI depositories would be necessary to bring about seamless transfer of treasury bills and government securities between RBI and Depository ledgers and for enabling this. The Government will take up necessary measures in this regard in consultation with RBI and SEBI.