Maiden ‘pay-for-success’ bond bets on OBC job jaunts abroad

Madhya Pradesh is set to break new ground in public finance by rolling out probably the country's first state-backed Social Impact Bond (SIB), a results-linked instrument that shifts financial risk away from the govt and ties public spending directly to outcomes. Finance minister Jagdish Devda flagged the move while tabling the state budget for 2026-27 in the assembly on Wednesday, announcing that the bond will soon be listed on the National Stock Exchange's Social Stock Exchange.Sources told TOI that the maiden SIB is a small, under Rs 5 crore project prepared by the OBC welfare department, approved by the cabinet and now in the final stages of listing. The project aims to train children from OBC categories in Japanese and German languages and place them in overseas jobs. Crucially, the state will repay investors only if the project achieves its goals. An SIB is a "pay-for-success" model in which private investors fund a social programme upfront, and the govt pays back — often with a return.Principal secretary, finance, Manish Rastogi, said the listing is imminent. "It is a project of the OBC department to train students of the OBC category for jobs abroad. The listing of the bond on the social exchange is in the final stages and is likely within a month. Bonds exist, but probably this is the first time a state is issuing one. It is a very good instrument and we will explore it for other areas like old age homes," Rastogi told TOI.Implementation will be handled through NSDC International, the international arm of the National Skill Development Council. Principal secretary, OBC welfare, E Ramesh Kumar, said the model is outcome-driven. "NSDCI will identify a risk investor. The investor will be repaid only after the candidate is placed and reports at the destination country. Monitoring will be done by a third party, and around 500 students will benefit," Kumar told TOI.