Social stock exchanges will help organisations working in the welfare sector raise funds (File)

Finance Minister Nirmala Sitharaman on Friday announced the setting up of a social stock exchange under the Securities and Exchange Board of India (SEBI) for listing of organisations which work for social welfare, as she presented her first union budget. The exchange would help social and voluntary organisations which work for social causes to raise capital as equity, debt or a unit of mutual fund, she said

Presenting the first budget of Prime Minister Narendra Modi's government after its re-election last month, the Finance Minister said that steps need to be taken to bring capital markets closer to people.

"It is time to take our capital markets closer to the masses and meet various social welfare objectives related to inclusive growth and financial inclusion. I propose to initiate steps towards creating an electronic fund raising platform - a social stock exchange - under the regulatory ambit of Securities and Exchange Board of India (SEBI) for listing social enterprises and voluntary organizations working for the realization of a social welfare objective so that they can raise capital as equity, debt or as units like a mutual fund," she said in parliament.

Ms Sitharaman also said the time is right to consider increasing minimum public shareholding from 25 per cent to 35 per cent.

She said a number of steps would be taken in consultation with the Reserve Bank of India (RBI) and the SEBI to deepen the corporate bond market.

Announcing measures related to capital markets, Ms Sitharaman said investments by Foreign Institutional Investors (FIIs) and Foreign Portfolio Investment (FPIs) in debt securities would be allowed to be transferred and sold to domestic investors in a timely manner and also proposed FPI investment in debt securities issued by Non Banking Financial Companies (NBFCs).

(With inputs from agencies)