You are here: Home » Current Affairs » News » National
Business Standard

Maharashtra: Civic body to co-create India's first social impact bond

Pimpri Chinchwad Municipal Corporation (PCMC) in Maharashtra's Pune district has signed an MoU with the United Nations Development Programme (UNDP)

United Nations | Maharashtra | Bonds

Press Trust of India  |  Pune 

bond market
Illustration by Binay Sinha

Pimpri Chinchwad Municipal Corporation (PCMC) in Maharashtra's Pune district has signed an MoU with the Development Programme (UNDP) to co-create "India's first" Social Impact Bond (SIB), officials said on Monday.

This type of bond lays down outcome-based targets to be achieved at the start of the contract, an official release said, adding that, in a first, a government body will act as the 'outcome funder' in a bond contrary to convention.

Under the SIB unique investment tool, the PCMC administration will only have to bear the costs of a public welfare project associated with the bond if the pre-defined project targets are fulfilled, the civic body.

"This type of bond lays down outcome-based targets to be achieved at the start of the contract. This feature allows for tracking the progress of the outcomes, thus ensuring transparency for investors. The mechanism also ensures that funds are used effectively and efficiently towards the project," the release said.

The PCMC further said the SIB will support the civic body in improving healthcare services for its citizens, especially with respect to the pandemic while incurring minimum investment risks.

"This is the first time that a government body will act as the 'Outcome Funder' in a bond, whereas traditionally most government-funded public projects require large and early investments by the government with a substantial gestation period of outcomes and involve various kinds of risks," it said.

The introduction of the SIB will attract more investors from public and private sectors to fund public welfare projects and thus help to meet the investment deficit currently hindering India's roadmap to SDGs.

"The social impact bond places PCMC at the forefront of adopting innovative mechanisms to drive social development, specifically in the healthcare sector, which is the cornerstone of our urban planning.

"This is in line with our vision of making Pimpri- Chinchwad the most livable city in India by 2030," PCMC Commissioner Shravan Hardikar said in a statement.

PCMC is currently operating more than 30 primary, secondary and tertiary level healthcare facilities with an aggregate 1,500-bed capacity. These facilities have been crucial in addressing the health crisis duringthe pandemic.

"The SIB will allow PCMC to not only upgrade the infrastructure but also build the capacity of its staff and establish protocols that can support higher quality healthcare," said the release.

Dear Reader,

Business Standard has always strived hard to provide up-to-date information and commentary on developments that are of interest to you and have wider political and economic implications for the country and the world. Your encouragement and constant feedback on how to improve our offering have only made our resolve and commitment to these ideals stronger. Even during these difficult times arising out of Covid-19, we continue to remain committed to keeping you informed and updated with credible news, authoritative views and incisive commentary on topical issues of relevance.
We, however, have a request.

As we battle the economic impact of the pandemic, we need your support even more, so that we can continue to offer you more quality content. Our subscription model has seen an encouraging response from many of you, who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of offering you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practise the journalism to which we are committed.

Support quality journalism and subscribe to Business Standard.

Digital Editor

First Published: Mon, January 04 2021. 18:36 IST