Consider the following statements in context of Development Impact Bond 1 It is a results based fina...........

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Consider the following statements in context of Development Impact Bond

1.It is a results-based financial mechanism to finance social sector.

2.The fund will be raised through cess recently imposed on petroleum products.

Which of the statements given above is/are correct?

1 only

2 only

Both 1 and 2

Neither 1 nor 2

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Explanation:

1 only

Statement 1 is correct. A Development Impact Bond is indeed a results-based financial mechanism used to finance social sector projects. Investors provide upfront capital to implement social programs, and returns are based on the achievement of predefined social outcomes.

Statement 2 is incorrect. Development Impact Bonds are not typically funded through a cess imposed on petroleum products. They are structured through partnerships between investors, outcome funders (often governments or philanthropic organizations), and service providers to achieve specific social goals.

Therefore, the correct option is 1.