Outcome-based finance models such as social impact bonds have the potential to truly catalyse change and deliver socio-economic impact at scale. Discuss. (Answer in 150 words)

Outcome based finance models are in centuries given by government based upon the outcome/production of an audit. Example: Product linked incentive scheme PLI. Importance of outcome-based finance: a They facilitate the growth and increase the industry competition in the market. b The finance is given based on performance matrices any cost to state. c It fosters the employment, revenues of scale and incentivize companies to perform.

d It opens the path for various unconventional sectors like semi conductor, chips, technology. Challenges: a It could lead to unhealthy competition and raises the morale of varying vigilant industries. b It can lead to increase in cost by public for the service by charge. c If companies could in doing wrong unlawful practices. Outcome based finance models are good to incentivise the manufacturing aims, however at the same time govt oversight and regulation is necessary.