‘Govt not yet ready to raise money through crowd-funding’

Coimbatore: The Rural Development Ministry has not yet thought of crowd-funding to raise money for infrastructure development in the country, a top official said today.

The infrastructure development, be it roads or other works, is carried out based on the allocated fund by the government, Chief Economic Advisor to the Ministry of Rural Development Sudha P Rao told reporters, on the sidelines of an international conference on crowd-funding here.

When told that Tamil Nadu has some schemes where projects were taken up with financial assistance of both private and government, she said as far as the Centre was concerned, the projects were being implemented by allotted funds.

Earlier speaking on the prospects and challenges of crowd-funding, Rao said India was undergoing transformation with people looking at new ventures and start-ups.

Stating that there were three ways of drawing funds such as donation/reward crowd-funding, debt crowd-funding and equity crowd-funding, she said, “The donation model is not that serious, but in the other two, some regulations would have to be in place in peer-to-peer lending.”

The RBI is bringing out a discussion paper on crowd-funding and SEBI has set up a committee under Infosys founder N R Naryanamurthy, which was to submit the report in the first week of this month.

However, it has not yet come out and is expected any time, said Rao, who is here to inaugurate the two-day conference at Sri Krishna Institutions.

Crowdfunding Professional Association President, USA, Scott McIntyre said crowd-funding was no fad; it will outlive many parts of the financial system.

Crowd-funding is a way of raising finance by asking a large number of people each for small amount of money, he said, adding that transparency and the historic nature of raising money this way was more critical in the system.

Asked if this could be utilised in sports sector, where many a talented person was not able to come to the limelight due to lack of money, he said, “So far this issue has not come to the fore and in future this can be discussed.