Like most developing countries, India suffers from many infrastructure related deficiencies that impact most strongly its lower class citizens. In trying to turn this situation around, India is attempting to utilize a new type of investment called a social impact bond, which has been used by many other locations around the world.
By raising money from private charities and individuals, the government is able to lessen the amount it has to spend directly on the bonds, saving the Indian taxpayer money and also bringing more stakeholders to a project. As a byproduct of that, the bondholders are more invested in the success of the project and also in making sure it is environmentally and socially friendly, and that it minimizes its negative aspects.
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Ganesh Natarajan is the Founder and Chairman of 5FWorld, a new platform for funding and developing start-ups, social enterprises and the skills eco-system in India. In the past two decades, he has built two of India’s high-growth software services companies – Aptech and Zensar – almost from scratch to global success.