New Delhi, Aug 10 (IANS): The government is planning to create a venture capital (VC) industry that will also help fund social sector initiatives, Minister of State for Finance Jayant Sinha said on Monday.

"There is one thing that we are trying to do... to create domestic venture capital industry that will also be able to provide funding for impact funds. We will soon be announcing our efforts in that whole area of domestic venture capital where funds would be available for impact funds as well," he said at an event here organised by the Axis Bank Foundation.

"The first aspect is the impact investment, that there is funding available for most good businesses," he said.

Impact investment denotes that made by organisations directed at profitably generating beneficial social or environmental impact.

"The 2 percent CSR (corporate social responsibility) funding is going to be a game changer for NGOs in India because tremendous amount of money will be available. It would be thousands of crores," said the minister.

Sinha said the challenge for India is that of balancing the need for growth with ecological demands.

"Climate change is irreversible. Water, soil cover are fairly irreversible things. So how do we have growth trajectory so that we can really be in tune with the ecological capacity that we have on this very densely populated sub-continent," he said.