Social Stock Exchange: The Way Forward for India

Social entrepreneurs have the potential to make a significant impact on the socio-economic development of the nation, but they struggle to find sustained funding. Social Stock Exchange can aid such for-profit social enterprises by bridging the funding gap and creating an investment ecosystem. A Social Stock Exchange (SSE) is a regulated platform to bring together social organizations to raise capital and impact investors to make financial returns while ensuring social and environmental sustainability at large. Globally, SSEs are already instituted in a handful of countries including Canada, Singapore, South Africa and the United Kingdom. In India, the vision of SSE was first floated by Union Finance Minister Nirmala Sitharaman in her budget speech in July 2019 to achieve various social welfare objectives related to inclusive growth and financial inclusion. Thereafter, in September 2019, the Securities Exchange Board of India (SEBI) constituted a working group to propose a feasible architecture for setting up the SSE mechanism. On September 28, 2021, SEBI approved the creation of the SSE under its regulatory ambit, providing a renewed impetus to social entrepreneurs and impact investors in the country. There is a dearth of research on SSEs in the public domain; therefore, this chapter attempts to do exploratory research striving to evaluate India’s framework of SSE approved by SEBI in contrast to the global models of SSEs.