the rights may also be auctioned on the exchanges.
Corporate India gets involved in building human assets for the nation under CSR. The spend under CSR is 2 per cent of profits become a limiting factor; given that the savings attributed to non-household private sector is 10 per cent of the GDP the CSR obligation may correspond to 0.2 per cent of the GDP. There would be a possible improvement in fiscal deficit to the same extent. But critically the human capital formation will slowly improve over the years. Corporate India could put its money where the others’ mouth is.
Food for thought
* Either a special purpose vehicle, funded by a consortium of public sector banks, could buy the ‘receivables’ or FCI, with expert assistance, could convert the receivables into ‘Rights for creation of Social capital’. These could be offered for sale to India Inc (for cash) in tranches
* Under CSR, now mandatory, India Inc could be induced to buy these rights that offer no return but can booked in the accounts of the corporate as “investment in social/ human capital of India”
* This investment could be allowed to be taken as an asset on the balance sheet of the corporate after allowing it to be deducted as an expense in its P&L, thereby capitalising the subsidy paid to FCI
* Thus government increases food security net with no effect on fiscal deficit and could even escape subsidy if it abandons the subsidy payment to FCI altogether
Author is a civil servant and ex-ED of Sebi; views are personal.?