Bhopal (Madhya Pradesh): The Finance Department is preparing to launch the state’s first Social Impact Bond (SIB) through the Other Backward Class (OBC) Department before the end of the current financial year.
The Social Justice and Health departments are also working on similar projects, but their proposals are yet to reach final approval.
A senior Finance Department officer said that a state-level steering committee has already given in-principle approval to the OBC department’s proposal, which will now be placed before the cabinet for final clearance.
An officer from the OBC Department, requesting anonymity, said the SIB project aims to facilitate overseas placements for 600 OBC youths in Germany and Japan.
A unit of the National Skill Development Corporation (NSDC) will set up a training centre to provide language instruction and orientation on local work skills to the selected candidates. The initiative is expected to enhance their employment prospects abroad.
There is also a possibility that the Scheduled Caste and Scheduled Tribe departments may introduce similar proposals in the coming months. Once finalised, the OBC project will be registered on the Social Stock Exchange of the National Stock Exchange (NSE) to mobilise funding for implementation.
First proposal was sent for reconsideration
Sources said the Social Justice Department was the first to express interest in launching a Social Impact Bond but its proposal was sent back by the Finance Department for reconsideration.
What is SIB
Under a Social Impact Bond, private investors fund a public welfare project, and if the outcomes meet agreed performance targets, the government repays the investors with returns. The model reduces financial risk for the government and links payments to measurable success.
Announced in last budget
The state government had first announced its plan to introduce Social Impact Bonds in the last budget. Work on the framework has been underway since then.
