Unlocking the promise of blended finance

Blended finance can strengthen the government's efforts to support the underserved sections of society by promoting efficient use of the limited resources and supporting long-term sustainability

The annual financing gap for India’s Sustainable Development Goals, which was already large, is estimated to have almost doubled after Covid. According to the government, the funding for the social sector has grown to 30 per cent of nominal gross domestic product but is still constrained by limited resources. This capital gap can be addressed through blended finance — the use of financial instruments to combine private, public, and philanthropic capital to (i) increase the capital available for development and (ii) allocate this capital efficiently towards achieving socio-environmental outcomes. Blended finance in India is now at an inflexion point and