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Daily Current Affairs – 2020
Topic: For Prelims and Mains
Social Impact Bond
Why in News?
Pimpri Chinchwad Municipal Corporation (PCMC) in Pune district of Maharashtra is going to issue India’s first Social Impact Bond / Social Impact Bond (SIB).
What is Bond?
Bonds are a means of raising money for the company and the government.
Money raised from bonds comes under the category of debt.
The company periodically raises money from bonds to expand its business.
The government also takes loans to bridge the income and expenditure gap. Government takes this loan through bonds.
The bonds that the government issues are called government bonds.
What are Social Impact Bonds?
Social Impact Bonds are bonds in which a contract is made with a public sector or operating authority.
Social Impact Bonds pay for better social outcomes in certain areas and share the savings earned from it to investors.
The payment and return / dividend of investment in a social impact bond depends on the attainment of predetermined social outcomes.
Social impact bonds are issued for a fixed period but do not provide dividends at a fixed rate.
Social impact bonds are not affected by reinvestment risk, interest rate risk or market risk like other traditional bonds.
Facts for Prelims
This is a special kind of hackathon where students and teachers from schools and colleges, design experts, toy experts and start-ups will get together to crowd source ideas for developing toys and games that are based on Indian culture and ethos, local folklore and heroes, and Indian value systems.
It is an inter-ministerial initiative.
The participating agencies are the Ministry of Education, the Ministry of Women & Child Development, the Ministry of Textiles, the Ministry of Information & Broadcasting, DPIIT, Ministry of MSME, Innovation Cell (Education Ministry) and the AICTE.