- Why in news
- On 22 October 2026, MoS Jayant Chaudhary marked NSDC's debut on the NSE Social Stock Exchange. NSDC issued its first Zero Coupon Zero Principal instruments, with NABARD subscribing ₹4 crore.
- What it is
- The Social Stock Exchange (SSE) is a segment of a stock exchange where social enterprises and non-profits can raise funds for social causes. A Zero Coupon Zero Principal (ZCZP) instrument is issued by a social-purpose organisation. It pays no interest and returns no principal to the investor, so the money works like a donation with reported outcomes.
- ZCZP instrument
- ZCZP lets eligible social-purpose organisations raise funds without interest or principal repayment. It stresses transparent use of funds and reporting of social outcomes.
- First issue by NSDC
- This was NSDC's first ZCZP issuance, with NABARD subscribing ₹4 crore.
- Social Impact Bond
- The government-funded part is an outcome-linked bilateral Social Impact Bond between NSDC and the Madhya Pradesh government.
- Regulator of SSE
- The Social Stock Exchange in India is regulated by SEBI and operates as a separate segment of the NSE and BSE.
Don’t confuse with ZCZP vs zero-coupon bond: A zero-coupon bond pays no interest but repays principal at maturity, sold at a discount. A ZCZP pays neither interest nor principal.
Don’t confuse with Social Impact Bond vs ordinary bond: A Social Impact Bond pays only if agreed social outcomes are met. It is not a standard debt instrument with fixed returns.
Economy terms and data: 42 Prelims questions since 2013, rising in recent years; they test what a term or instrument means. In Mains, 12 news-triggered questions.
Why it matters
- Opens a market route for social funding beyond grants and CSR, linking money to measurable outcomes.
- Supports skilling and overseas employment for poor households.
Problems
- Investors get no financial return, so donor interest may stay limited.
- Verifying social outcomes and avoiding misreporting is hard.
Way forward
- Strengthen independent impact audits and standard outcome reporting.
- Widen participation by CSR funds, philanthropies and retail donors.
Put in your answer
Blended outcome-linked financing: The NSDC programme mixes beneficiary, SSE and state funds, with the state share paid on placement. It can be cited as an example of outcome-based financing.
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UPSC’s own questions that come close to this issue, from our Prelims and Mains banks.
No practice question for this one; the card may still help an answer. Why: NSDC issued ZCZP instruments on the NSE Social Stock Exchange. Economy terms are 13% of Prelims; the release gives few testable facts.
Source: PIB, Ministry of Skill Development and Entrepreneurship, 22 Oct, 18:25 IST · Release 2326769
Worth revising until Prelims 2028: most news questions come within two years of the event.