Social Stock Exchange (SSE), a concept recently introduced by the government, is a platform which allows Non-Government Organizations (NGOs) and voluntary non-profit organizations to raise capital for social services. However, it could face disclosure hurdles. The reason for this is – the NGOs are wary about the fact that disclosure requirements compulsory for listed companies will also be applicable to them. Further, they are also finding the additional requirement of undergoing social audit onerous.
In this respect, it is the view of the capital market regulator i.e. SEBI that social audit is important as it is an assessment of how the company is achieving its goals or benchmarks for social responsibility. The regulator also expressed that imposition of such checks and balances is important as it will reduce the risk of fly-by-night operators.
However, the people in the social sector believe that the idea of bringing in more transparency is not correct. They said that even after complying with the provisions of Foreign Contribution Regulation Act, 2010, the recent cracking down on civil societies is unfortunate. They also viewed that NGOs in India being already regulated by multiple agencies such as the Income Tax, Ministry of Home Affairs and the Registrar of Societies, additional requirement of social audit is not feasible.
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