Press Trust of India
New Delhi, August 10: 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 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. He said India is facing many challenges including job creation, climate change and lack of scalability and innovation. “The first and foremost challenge that India faces is jobs. We understand…if we don’t create jobs, we have whole generation which would be jobless. Jobs are our single biggest challenge.
Every year, 10-12 million people enter the workforce. Of this, 5-6 million are graduates while only 1-2 million jobs are added in organised sector. “So, there is a massive gap…we have to create jobs,” he said. On environment issues, he said, “Climate change is irreversible…water, soil cover are fairly irreversible things. So how do we have growth trajectory so that we can really be in tune with the ecological capacity that we have on this very densely populated sub-continent.”
