Civil Society News, New Delhi
Published: Jul. 20, 2020
The idea of having a Social Stock Exchange in India has been circulating since it was proposed by Union Finance Minister Nirmala Sitharaman in her budget speech last year.
Dr R. Balasubramaniam has done a detailed report on the concerns and opportunities that emerge from a Social Stock Exchange. He is a physician by training and is the founder of GRAAM (Grassroots Research and Advocacy Movement) (GRAAM) and of the Swami Vivekananda Youth Movement (SVYM).
The concept of a Social Stock Exchange (SSE) is very different. The essential difference is that companies on such an exchange don’t exist for the profits of any person. Instead their purpose is a larger social good. But the exchange plays a role similar to that of a stock market regulator. It gets entities listed, the investment, financial instruments validated whether it’s a debenture, an equity investment, or a debt instrument. The companies transparently disclose if they are making profits and the investor’s interest is also protected. While the investor can expect near market returns, the intent and primacy of the listed entity is social change and development.
the United Nations proposed the idea of the Social Stock Exchange Initiative (in 2009) where such disclosures would be mandated, and companies would get returns along with declaring the social good they were creating. So private gains began getting merged with the notion of social gains. Different companies have attempted this, essentially creating social enterprises whose primary terms of existence is to create social good and also ensure that the investor gets some fair returns.
There are close to 14 Social Stock Exchanges globally in several countries in different stages of evolution. Not a single one can be called fully functional and successful.
The ideal is if you can list, declare and trade. Let’s say you invest in the Swami Vivekananda Youth Movement and we give you shares and a certain amount of dividends. Tomorrow say someone is interested in buying those shares from you. If they can do it then that’s a well- functioning stock exchange. It’s only in the Canadian Stock Exchange that a reasonable amount of trading is being transacted. Most of the other stock exchanges haven’t fully evolved to this stage.
NGOs are one of the largest employers in this country. Just because we don’t formally declare how many people, we employ we don’t get support. Everybody else, like small and medium enterprises get support. They are all seen as wealth creators. We are also wealth creators. You don’t monetize the social wealth that we create.
A huge number of people are getting laid off in the NGO sector. About 30 to 40 percent of NGOs will disappear next year because the entire financial spectrum is going to change. Let’s look at options of strengthening the sector because civil society is a very mature representation of democracy. It is not a threat to democracy. It is integral to our growth and evolution.