Govt mulls policy push for VC funds to invest in social sector

Government is planning a policy push to help create domestic venture capital industry for enabling greater fund flow into social initiatives that promote sustainable development and create jobs, Minister of State for Finance Jayant Sinha said on Monday. “One thing that we are trying to do is to create domestic venture capital industry that will also be able to provide funding for impact funds,” he said at a function organised by Axis Bank Foundation here.

“We will soon be announcing our efforts in that whole area of domestic venture capital where funds would be available for impact funds as well,” he said. “The first aspect is the impact investment. There is funding available for most good businesses,” he said. He did not elaborate on the initiatives being planned by the Government in this direction.

‘Impact investment’ refers to investments made by organisations with the intention to generate a measurable, beneficial social or environmental impact in a profitable manner.Sinha further said that the 2 per cent allocation of net profit made by corporates as per the new Companies Act for Corporate Social Responsibility (CSR) will provide huge sums for various sectors. “The 2 per cent CSR funding is going to be a game changer for NGOs in India because tremendous amount of money will be available. It would be thousands of crores,” he said.