- A Monthly Newsletter from VANI

May - June, 2011

Archive eVANI
In this Issue:
  • From editor’s Desk
  • Interview
  • VANI news
  • News in General
27th June, 2011 : First Regional Meeting on FCRA Act, 2010 at Hyderabad Read more...
16th-17th June 2011: State level meeting at Patna, Bihar
 FCRA registered NGOs need not obtain prior approval while transferring funds to other FCRA registered organisations - VANI receives clarification from the Ministry of Home Affairs.



List of agencies exempted from the definition of foreign source under section 2(1)(j)(ii) of the Foreign Contribution (Regulation) Act, 2010
Click here to

Common Ground for Rejection of Applications Under FCRA 2010
Click here to

An Executive Summary of the Report on the study on Social, Economic and Political Dynamics in Extremist Affected Areas.
Click here to read the report>>>


About e-VANI
e-VANI is published monthly and provides updates on VANI’s programmes and activities, news in the development/voluntary sector and useful resources to strengthen the capacity of development/voluntary organizations.
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Edited & Written by :
Binu Sebastian
Designing & Layout by: Rajkumar Sharma

From Editor’s Desk

Will Small Voluntary Organizations Perish in the Coming Years?

Today, the voluntary sector is facing one of the most challenging times in the recent Indian history. The worst affected would be those small organizations operating in the remote villages, towns, blocks and districts. These organizations have been an effective link as well as a vehicle to reach the poorest persons in the remotest locations. Some call them ‘Jhola Wallas’, or grass root activists. Most of them are either the products of a social action, or networks created by large organizations, donors or government projects to deliver services. Many of them operate with minimum infrastructure, but are engaged in innovative development work or are associated with rights based approach. Unfortunately, these small voluntary organizations become the first target of all the attacks on the sector. Besides the repercussions of the changes in the regulatory regime, the misinterpretation of rules, changes in resource scenario or the new methodology, etc, will have serious implications to these small organizations.

Many of the members of VANI are from this section of voluntary sector and through this note, I would like to make an attempt to highlight their plight. I would also like to place a few suggestions, which I believe would be effective in safeguarding them. I believe that such protective measures are critical to keep the quintessential spirit and the soul of the voluntary movement in India.

As I stated earlier, most of these organizations are products of various social movements at the grass roots level. Their thematic interventions are varied; like access to health, natural resources, education, empowerment of marginalized groups like dalits, women, or tribals, etc. They have gone through a period when educational and material support was readily available for their cause from the large voluntary organizations, donors as well as the government. The spirit of large national and International NGOs was such that those small organizations could easily garner the required support. Many large support organizations existed to build their capacity as well as to help them in documenting their practices.

However, the changes in the voluntary sector in the last few years affected a radical makeover in the whole scenario. Consequently, they have become increasingly isolated with the support and the resources are hard to come by. The process, language, and methodology to seek financial support have become more difficult and complicated. The gradual shrinking of financial resources and changes in the nature of support available to the sector has brought them at a crossroad. The simple procedures of resource mobilization have been replaced by complicated terminologies and processes like log-frames, result based management, RFPs and power point presentations. The competition to grab meager resources among VOs has even percolated down to district and sub-district levels. There is a sense of competition, helplessness, and inequality within the sector. Many of these small organizations are at the mercy of district and block level officials to get support to fulfill their visions.

In addition, the arbitrary interpretation of project procedures by the line departments and lack of information among smaller VOs have created perfect recipe of corruption and harassments. We all know that partnership with government is being replaced by sub-contractorship, wherein tenders are being floated. Many a time, small organizations find it difficult to respond to these tenders in the required language and with proper documentations. Worse still, the recent trend of demanding security money for government projects has become a serious menace. It is hard for the small organizations to provide the required security deposit to participate in the tendering process for the government projects. Though the government of India emphasizes on the need to generate local resources, these organizations seldom get access and opportunity to interact with potential donors. In addition to these, the vacuum of educational support and hand-holding within the sector is being filled by so called ‘consultants’, who, at times provide illegal shortcuts and there are also instances where they have taken the smaller organizations for a ride...! 

Another significant change is the stricter regulatory environment in which the voluntary sector has to operate now. Although, they affect organizations of all sizes, the serious blow is to the very existence of smaller fraternity. There are instances wherein in almost every month, they are being inspected by various law enforcement agencies. Even when the officials from Intelligence Bureau visit them to verify mandatory FCRA requirements, the villagers tend to develop a feeling that something is amiss with the organization. This is even more true to those VOs operating in so-called disturbed areas. On many occasions, they are required to report their activities on a daily basis. Not only their staff is harassed but even heads of the organizations are asked to give written undertaking that they would not work in a rights based approach.

Even at the peak of unregulated economy, the governments across the world introduce special provisions for small-scale industries. The Indian government and the large corporations are always protective about the small-scale industries, but why do we not have such policy in the voluntary sector? Today, we need to lobby with our government to introduce special provisions for safeguarding the small scale VOs. The life and spirit of voluntary sector is dependent on small and medium sized organizations. Therefore, we have a responsibility to protect them through a process of handholding, earmarking financial support and by promoting partnership. We must make sincere efforts to ensure that the next five-year plan reserves some category of work exclusively for the small organizations. We must also lobby with the donor agencies to re-start the capacity building initiatives on the new methodologies, techniques, and concepts of development.

Harsh Jaitli


The absolute relevance of an issue and its implications to the poor and marginalized should be the matters of concern for all of us. The persistent debates, in relation to the legitimacy of institutions to raise them, however authentic they are, can only sideline and weaken the core issue that we are intending to address. Here, Mr. Jayant Kumar, the chairperson of VANI shares his perspectives with Binu Sebastian on some of the ideological debates going round at the moment.

The India against Corruption Campaign has been instrumental in bringing into fore the age-old tussle between the ‘government’ and the ‘civil society’. What do you think are some of the overarching ideological highlights of the ongoing impasse?
As we all know the citizens of the country form the government. In this sense, it is an extension of the people themselves bestowed with constitutional powers and prerogatives. The civil society too has been formed by the people in the country. Hence, ultimately both the government and the civil society are the formations of the society. I agree that the process of these two formations is entirely different in nature. However, I believe this basic understanding should nullify the perception of having a ‘tussle’ between the government and civil society.

Here, in the context of the Jan Lokpal Bill, the entire issue is about accountability. The fundamental question here is about the legitimacy and the effectiveness of a particular institution in ensuring accountability. The state feels that it is their prerogative as the parliament consists of elected representatives who enjoy constitutional rights and privileges. Constitutionally speaking, the parliament is the supreme body and has the right to enact laws and ensure its effective implementation. However, what should be noted here is that the present impasse is an outcome of the failure of the state to ensure accountability and to keep its promises without infringing on the rights of the citizens. The parliament has certain responsibilities towards its citizens. Whenever a system fails to safeguard the best interests of its citizens due to systemic problems, the citizens do have a right to raise their voice to ensure that the system works for them. While the state emphasizes that it is their prerogative to ensure accountability, they should also remember that whenever they fail to do so in a consistent and systemic manner, then the people have the right to stand up, and it will always take place in a democratic set up.

In short, you are hinting that such impasse between the civil society and the government is fundamentally due to the systemic deficiencies that the successive governments have not been able to address effectively;
Yes, this is exactly what I am trying to communicate. The corruption has become a major threat across all layers of governmental institutions eating up public resources. However, there has been no political will to tackle this issue in a comprehensive manner. We should note that the first attempt to introduce the Lokpal bill was made in 1961, but has not seen the light of the day until now. One of the apparent reasons as to why the state has not enacted a strong Lokpal bill is because it believes that this would be a threat to its own functioning. Therefore, in such a society, the citizens do have a right to raise their voices and the state should honor the right of citizens by ensuring transparent, accountable, efficient, and effective system. The state should realize that it is the right of the people that they are trying to assert through these efforts.

On the face of it, the relationship between the government and the civil society seems to be heading towards a serious confrontation with the government saying that the civil society need not have any role in law making, as it is the prerogative of the parliament. What do you think is the core issue? Moreover, what is the way out?
It is always said that there are three pillars of a democracy, government, market, and the civil society. The government ought to control market in the best interests of its citizens. In a strong and vibrant democratic set up, there needs to be an active civil society to ensure that the government fulfills its duties in tandem with the constitution of India. Stronger the civil society you have, stronger the government, and as a result you have a stronger democracy. On the other hand, if you have a weaker civil society and a stronger government, you may not have a strong democracy in place. I believe that one of the principle hallmarks of developed countries is the active involvement of civil society with the state. There is a space for dialogue and discussion and they are an integral part of the process of framing public policies. It should also be admitted that some prerogatives of the parliament that can never be diluted. However, the involvement of civil society is very crucial in setting up strong democratic institutions within a country. As I mentioned earlier, the confrontation that we see today is because the state has failed to deliver. The corruption is rampant right from centre to the remote areas. It has crept into the highest level of bureaucracy and the political institutions. Unfortunately, the state feels that if it listens to the views of the civil society today, it will have to face many other challenges in days to come. This is unfortunate, the state should actually consider this as a positive contribution from the side of civil society and take a proactive step to sit together collectively to explore what can be done to address issues like corruption.

 The way out from this impasse is to have a give and take relationship, as it cannot be a one-sided approach. There is a need to ensure that the institutions that we are going to create are powerful and independent and will have the necessary capacity to investigate and take remedial measures. The way out is to have proper negotiation in a positive framework. It is unfortunate that various experienced senior ministers are questioning the legitimacy of the civil society and taking it as a threat. What they need to understand is that as long as the state does not perform well, it will continue to have challenges. Either civil society or movements or the people themselves will challenge the systems and this is an integral process of democratic framework.

 In the light of this stalemate, what is your observation on the attitude of the government towards the civil society? Is it constructive and just token in nature?
Ideally, the relationship between the state and the civil society should be symbiotic in nature. Both benefit from each other and are dependent on each other. Therefore, I think there needs to be more genuine efforts from the state to listen to the civil society. It should also be mentioned in this context that the contribution of civil society has been very crucial in laying down some of the progressive legislations like RTI, NREGA, Right to Food etc. At times, the pressures and negotiations have borne fruits in framing strong and effective policies. However, if one goes to the implementation of these policies, it is very pathetic. We can see that all the good policies boil down to zero due to the rampant corruption. Therefore, the corruption is an important issue that we need to address head on. Unfortunately, what we witness today is that if we protest against such practices of corruption, there is a growing intolerance from the state towards such efforts.
I would like to say that the stalemate is not an answer. It is a negative process. What I feel is that the state has to be more tolerant and receptive and the dialogue has to continue. We need to move away from the confrontational mode to a process of constructive negotiation. What should bind us together is the genuineness of the issue that we are trying to address. Is the issue that we are talking about genuine and does it have any implication to the poorest and the marginalized? Is there any existing mechanism to address these problems and does the proposed mechanisms have the wherewithal to address the same? We need to act upon these core questions.

Questions have been raised across the corners about  the ‘legitimacy’ of the civil society groups if they can really be considered as representing people’s aspirations. What are your views on this?
I think the civil society has the legitimate right to bring up these issues. Our society is in the state of transition. Many people still live below the poverty line; many do not have access to quality education. In spite of all these, our systems do not inspire confidence to allow people to demand their rights. A large number of people do not stand upfront to take on any corrupt government official, police officer or anyone in that matter. When a situation like this exists where there is lack of awareness and confidence, there is a role for enlightened citizenry to speak on behalf of the citizens of this country. What is important is not the number, but the genuineness of the issue. Even if a single individual, a civil society, or a group raises this issue, it has a legitimacy of its own that is as equal to any elected representative. In conclusion, what I would like to say that in the given context that we live in, the civil society or even an individual has the right to raise their voice around legitimate issues. This cannot be questioned.

 How would you respond to the allegation that the organized civil society or the voluntary sector has not lent a substantial support to these movements?
There is no denying that we need to do much more on this. There has to be a collective pursuance of this cause and to support those individuals and groups who are taking these issues forward. The need of the hour is not to create parallel movements. As long as we are convinced that this cause is genuine, then we need to support the cause. I am personally convinced that a strong Lokpal Bill will be an effective deterrent to many corrupt politicians and bureaucrats. It will ultimately strengthen the legitimacy of the parliament and other government institutions. I believe that all the civil society groups, irrespective of their varied thematic interventions, should come forward to support these efforts.

We need to bear in mind that the struggle in all other areas of development is essentially linked to corruption and its other dubious manifestations. Let me share with you an experience that I had while evaluating the state of affairs of the primary health in a remote village in Chattisgarh. I was saddened to learn from the Asha workers that they were asked to clean the blood of those delivery cases when they approached the authorities for collecting the money that they were entitled for promoting institutional delivery. The money was provisioned under Janani Suraksha Yojana (JNY) of National Rural Health Mission (NRHM). If they did not oblige, they were denied the payment. We live in this sort of society where corruption has almost eaten up the very foundations of many public institutions. Therefore, I strongly feel that we all need to support these movements for the greatest good of the largest section of our society.

 ‘Parliament’ Vs ‘People’ is at the core of the debate at present. How do you respond to this? What are your takes on this?
Our democracy is still to be evolved a lot further as it is far from being ideal. As a result, many undesired elements get into the parliament and are legitimized because of a democratic system. We should remember that the people in the parliament are elected by the people for a period of five years. Hence, I see no seeming relevance to the argument on having the tussle between parliament and the people. Further, going by the constitution, there is no doubt that parliament is the supreme body. However, this is supreme as long as it delivers and accountable to its people.

The question here is how we get the most deserving people into the parliament. The political scenario today presents a peculiar situation where one can enter into the parliament or even state assembly if only he or she is born in a political family or is very rich and influential, or is a very famous journalist or businessperson. There are very few cases of other people getting elected. Unless we reform this whole electoral system, we will fall short of a genuine functional democracy.

What do you think should be the role of voluntary sector at this juncture of serious ideological debates? Do you agree to the perspective that the sector needs to be more forthcoming and put its best foot forward to assert itself?
Voluntary sector is an important pillar of democracy and this needs to be protected and nurtured. There is value degradation everywhere; it is not limited to political class only. This is also applicable to the voluntary sector. There is good, bad and the ugly in every spectrum and what we need to do is to nurture the good. However, I would like to reemphasize that voluntary sector is very crucial in maintaining a balance and to keep a check on the state and the market that they deliver within the set parameters and fulfill their promises. Therefore, the voluntary sector has to be nurtured and its efforts need to be appreciated. The sector also needs to be stronger and bolder in its approach and articulation. This is possible only when the sector itself becomes transparent, accountable and unified and open for any kind of scrutiny.

 Do you think that voluntary sector today is upfront when it comes to the critical social issues like corruption? Alternatively, do you suggest any specific roles that the sector need to focus on?
Voluntary sector has been the single entity that has challenged the state and the market despite many difficulties. Having said this, I would like to state that there is space for more consolidation and unification of our efforts. Looking ahead, I have a strong feeling that huge challenges lay ahead of the sector. This is not just about financial sustainability, but about ideological debates and capacity. The context and dynamics are constantly evolving and changing. As I already stated, this is not just about financial challenges, but it is about its own existential relevance and identity.


Past Events - May
May 3-4, 2011: Open Forum for CSO Development Effectiveness, Asia Regional Synthesis Workshop, Jakarta, Indonesia: The objectives of the workshop were to heighten the awareness on the CSO development effectiveness agenda by involving more and new CSOs to the process and to deepen the discussion on the draft global framework for CSO development effectiveness and contribute to its finalization. Sixteen participants from different Country Core Groups (CCGs) attended the workshop. Harsh Jaitli from VANI participated in the workshop.

May 09, 2011: FCRA meeting, CASA, New Delhi
VANI organized a consultation on FCRA Rules 2011 to discuss on its possible implications. Various financial experts and leaders from the development sector attended the meeting. One of the conclusions from the meeting was that nothing much could be done with the rules now as they are already notified. The important thing is to equip the sector to comply with the given norms.

May 24, 2011: Harassments and constraints faced by small and medium sized voluntary organizations at grass roots levels
These harassments to the voluntary sector range from arbitrary implementation and interpretations of Income Tax, FCRA to arbitrary allocation of tasks by the state line departments. Against this backdrop, VANI organized a consultation at CECODECON, Rajasthan to look at it from the state perspective.

May 26, 2011: Half-day consultation on FCRA 2010 and Voluntary Sector in India Against the backdrop of the recently introduced FCRA 2010 and rules 2011, a half-day consultation was organized to discuss about the implications of these changes and to deliberate on the future steps that the VOs could take up collectively to address them. The consultation was organized at CNI Bhawan, New Delhi.


Past Events - June

June 09, 2011: Consultation on Regulatory Regime
 For the last few years, the voluntary organizations in India have been facing experimentation in the regulatory regime by the government. As a result, new FCRA Act 2010 has been introduced. There are also attempts to introduce new Direct Taxes Code and to frame a National Law for the registration of Voluntary Organization. It is not just in India, but signs of such trends are visible across the globe.

June 16 -17, 2011: State level meeting at Patna, Bihar
VANI, along with its partner ABHA, organized a state consultation with an objective to update small, medium and large organizations, with the changes in the regulatory environment, such as FCRA 2010 and the proposed Direct Tax Code. The idea behind this meeting was to provide information to all VOs about the expected responsibility and rights under the law.

June 27, 2011: First Regional Meeting on FCRA Act, 2010 at Hyderabad 
As part of the outreach program of the Ministry of Home Affairs, about the new Foreign Contribution (Regulation) Act, 2010, VANI along with FMSF and Ministry of Home Affairs organized the first Regional Meeting at Hyderabad on June 27, 2011. In the daylong deliberation, Sh. GVV Sharma, Joint Secretary (Foreigners) addressed the meeting.


FCRA Rules notified acknowledge some of the recommendations submitted by VANI
The Rules under new Foreign Contribution 'Act 2010' have been notified by the Government of India and are applicable from May 01 2011. From the day the framing of rules started, VANI began its formal and informal advocacy to make the necessary amendments in the rules. Consequently, the Ministry has accepted some recommendations from VANI.
Click here to read the recommendations accepted by the ministry>>>

An Analysis of Foreign Contribution (Regulation) Act 2010 & Rules 2011

VANI and FMSF have made a collaborative effort to comprehend the implication of FCRA 2010 & Rules 2011. Subsequently, a document has been prepared to assist the VOs to update them with the salient features of the new Act and address the possible questions that they might have on the same.
Click here to read the report>>>

FCRA registered NGOs need not obtain prior approval while transferring funds to other FCRA registered organizations - VANI receives clarification from the Ministry of Home Affairs.
Subsequent to the request from VANI, it received a communication from the ministry with the above clarification.
Click here to read the request from VANI and the subsequent reply from the ministry >>>

Forthcoming Events
July 11-12: “New Taxation Code and FCRA amendments” – Challenges and Implications for the Voluntary Sector
VANI will be organizing this consultation in collaboration with Uttar Pradesh Voluntary Action Network (UPVAN). The objective of the workshop is to devise a future strategy for influencing policy makers to redress unnecessary field harassments through documentation and compilation of Citizen’s Reports.

News in General
Non-profit sector under tax scanner
NEW DELHI: The non-profit sector is expected to face tough scrutiny from the taxman in the coming days as the income tax department suspects that charitable institutions are being used to avoid tax payment. A senior official said the focus would specifically be on educational institutions, considering that several politicians in the South and Maharashtra were associated with them and most of them were being run by trusts or through charitable institutions. "Several businesses are also run under the garb of charitable work and we provide exemption to them," the official said.

Civil society members seek inclusive growth in 12th Plan
NEW DELHI: Civil society representatives have slammed the current growth-led model of planning. They argued that mere GDP growth does not reflect equitable development, and is fundamentally flawed. NGOs and voluntary groups have suggested that the planning process should be made more participatory and inclusive.

Emerging India leaves women out of loop
India is a frontrunner in the race for rapid growth among the emerging economies collectively known as BRICS, but it lags well behind the others when it comes to taking women along in its progress.

India among major economies to drive Asian growth
According to an ADB report, India would grow to be a US $40.4 trillion economy by 2050 from the current US $1.4 trillion in 2010
India and six other major economies in Asia will drive the region's growth, which, according to current projections, could account for more than half of the global gross domestic product by 2050, the Asian Development Bank (ADB) said in a report released on Wednesday.

Voluntary Action Network India (VANI)
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