185cf432 the role of ngos shgs development processes www.visionias.in

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G. S. PAPER II GOVERNANCE, SOCIAL JUSTICE

Topic: (9)

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34. 5' '%ve 6p%#"icip%"io!7 %!& 6epo0e#e!"7 -%i!e& 0i&e c##e!c i! #ece!" &evelope!" li"e#%"#e8

Decades of development efforts have provoked a feeling of disenchantment with the conventional growth-oriented

strategy of development not prodcing the desired trickle-down effect

!he failres sensiti"ed the planners and administrators to the need for drawing on the indigenos knowledge system

of the local people

#nless people themselves participate$ the programmes administrated %y e&ternal agencies remain e&ogenos to the

rral commnity there%y affecting reslts

A people-centred vision is %eing advanced %y citi"en's organisations working to create an alternative world order

%ased on economic (stice$ environmental sta%ility and political inclsiveness

As the )man Development *eport +#,D 1/0 commented eople's participation is %ecoming the central isse of

or times3

3. So, i$ people p%#"icip%"io! % #ece!" &i$cove#8

4eople' as real actors in history have %een %roght forward %y the 4S%altern' school. easant resistances were s%tle

and effective peoples' actions against oppression. eople do act$ it is for s to appreciate it and mo%ilise it for

participatory people-centric movements. eople as development actors emerged long ago in the vision and action of

!agore at Shantiniketan and 5andhi at 6ardha. !agore e&perimented with people centred rral development in the

villages for the re(venation of rral arts and crafts and economy in general. 5andhi relied on the mo%ili"ation of

masses and their economic pliftment throgh the development of cottage and small-scale indstries

3. O. I -e" "'%" p%#"icip%"o# &evelope!" i$ ipo#"%!". 5'%" $'%pe$;+o#$ &oe$ i" "%e8

Anisr *ahman has identified the following different forms of commnity organisations representing collective action

%y the nderprivileged people to improve their socio-economic conditions

7irst$ there are grassroots organisations that are %asically economic in natre$ ndertaking income-generating

activities with the help of internal resorce mo%ili"ation spplemented %y resorce and knowledge spport from

otside

Second$ there are other organisations that emerge in 4pressre grop' activities. !hey resist e&ploitation or oppression

%y other grops$ assert economic$ social and hman rights inclding women's rights$ or demand services from the

p%lic agencies

!hird$ some of the organisations ndertake social and cltral activities in sch areas as health$ edcation$ cltre and

so on

7orth$ some aim at the promotion of holistic life %y way of activities that integrate spirital advancement with

economic and social development

7ifthly$ commnity organisations to promote ecologically oriented socio-economic life are also growing in many areas

sch as organic agricltre$ social forestry$ coastal fishing etc

Si&th$ participatory action research is %eing prsed %y some organisations to develop people's own thinking a%ot

their living conditions and environment

3


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9onitoring is %etter$ and sstaina%ility of the pro(ect is more likely even after the withdrawal of the e&ternal agent$ %e

it government or ,5: agency

!he commnity learns from its own involvement and from this point of view$ participation is a 2 way learning process

in which the administrator and the people %ecome co-learners

Active commnity participation helps re%ild commnity cohesion and installs a sense of dignity into the commnity.

eople gain in confidence and steadily emerge as real actors in the development process.

3=. I$ co!i" p%#"icip%"io! "'e!* "'e %!$0e# "o %ll &evelope!" p#o2le$8

;ritics of commnity participation arge participation has poplarity withot clarity and is s%(ect to growing

faddishness and a lot of lip service

Serios analysis of local commnity life reveals differentiation in terms of stats$ income and power. ;onflicts and

rivalries are not ncommon even among the poor and nderprivileged. !he romantic vision of frictionless$

harmonios commnity life does not match grond realities

ad-hoc approaches are the norm. !hestate in reality is not willing to part with power and to devolve resorces to local commnity grops. Also$ the

%reacrats and the technocrats have their own ways of %ringing a%ot efficient3 local development management.


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Still$ commnity participation is not$ in theory$ re(ected and decentralisation contines in an ad-hoc fashion with a

plrality of actors

articipatory mode ;haracteri"ed %y state's own initiative to create instittions of commnity participation to ensre

effective involvement at the grassroots level. !here are no lterior motives and genine poplar involvement is

ensred %y providing resorces to local %odies and sensiti"ing %reacracy throgh training and directives. 6ithin an

overall development planning framework$ the central$ regional and local development policies and activities are

harmoni"ed throgh positive political will and %reacratic spport

+7ollow-p ? 6hich of these modes is tre for India@ )ave we evolved from one mode to another or is there one

particlar mode more applica%le or does the state adopt different modes at different timesplaces0

Enough of participation, lets come to voluntary organisations:

3: 5'%" i$ % NGO8

According to the 6orld 8ank$ a ,on-governmental :rgani"ation +,5:0 is a private organi"ation that prses

activities to relieve sffering$ promote the interests of the poor$ protect the environment$ provide %asic social

services$ or ndertake commnity development3. In other words$ ,5:s are legally constitted organi"ations$ operate

independently from the government and are generally considered to %e non-state$ non-profit oriented grops who

prse prposes of p%lic interest3. !he primary o%(ective of ,5:s is to provide social (stice$ development and

hman rights. ,5:s are generally fnded totally or partly %y governments and they maintain their non-governmentalstats %y e&clding government representatives from mem%ership in the organi"ation.

In a democratic society$ it is the state that has the ltimate responsi%ility for shering development to its citi"ens. In

India$ throgh the progressive interpretation of the ;onstittion and its laws and policies$ the scope of development

has %een significantly %roadened to inclde not (st economic progress for citi"ens$ %t also promotion of social

(stice$ gender eBity$ inclsion$ citi"en's awareness$ empowerment and improved Bality of life. !o achieve this

holistic vision of development$ the state reBires the constrctive and colla%orative engagement of the civil society in

its varios developmental activities and programs. ,on-governmental organisations +,5:s0 as the operational arm of

the civil society therefore have an important role in the development processes.

3: 5'%" %#e "'e &i++e#e!" "pe$ o+ civil $ocie" o#-%!i$%"io!$8

1. ;ivil rights advocacy organi"ations to promote hman rights of specific social grops e.g. women$ migrants$

disa%led$ )IV$ se& workers$ Dalit people$ tri%al people$ and the likes.

2. ;ivil li%erties advocacy organi"ations to promote individal civil li%erties and hman rights of all citi"ens$ rather

than focsing on particlar social grop.

/. ;ommnity %ased organi"ations$ citi"en's grops$ farmers' cooperatives to increase citi"en's participation on p%lic

policy isses so as to improve the Bality of life in a particlar commnity.

=. 8siness and indstry cham%ers of commerce to promotion policies and practices on %siness.

C. a%or nions to promote the rights of employees and workers.

E. International peace and hman rights organi"ations to promote peace and hman rights.

F. 9edia$ commnication organi"ation to prodce$ disseminate$ or provide prodction facilities in one or more media

formsG it incldes television$ printing and radio.

H. ,ational resorces conservation and protection organi"ations to promote conservation of natral resorces$

inclding land$ water$ energy$ wildlife and plant resorces$ for p%lic se.

. rivate and p%lic fondations to promote development throgh grant- making and partnership.

1. Also the ;ivil society incldes - olitical artiesG *eligios :rgani"ationsG )osing cooperatives$ slm dwellers and

resident welfare associations.

3: 5'%" '%$ 2ee! "'e i!"e#%c"io! %!& #el%"io!$'ip 2e"0ee! "'e I!&i%! $"%"e %!& NGO$ lie8

In India the state policies have significantly inflenced the formation of ,5:s and their activities. !he government

sponsored and aided programmes provided financial assistance to ,5:s either as grants or as matching grants to


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spport the implementation of social development pro(ects. !he need for the involvement of volntary organisations

has %een acknowledged %y a nm%er of official committees dealing with development.

8alwant *ai 9ehta ;ommittee$ 1CF !oday in the implementation of the varios schemes of commnity

development$ more and more emphasis is laid on ,5:s and workers and on the principle that ltimately people's

own local organisations shold take over the entire work

*ral-#r%an *elationship ;ommittee$ 1EE ocal volntary organisations can %e very helpfl in mo%ili"ing poplar

spport and assistance of the people in the activities of local %ody. It is possi%le to maintain constant and closecontact with the people throgh these organisations

Ashok 9ehta ;ommittee :f the several volntary organisations engaged in rral welfare$ a few have helped the *Is

in preparation of area development plans$ condct feasi%ility stdies and cost%enefit analysis$ e&plore ways and

means to indce local participation in planning and implementation.

In the Si&th 7ive Jear lan +1H-1HC0$ the government identified new areas in which ,5:s as new actors cold

participate in development

!he Seventh 7ive Jear lan +1HC- 10$ envisioned a more active role for ,5:s as primary actors in the efforts

towards self-reliant commnities. !his was in tne with the participatory and empowerment ideologies$ which was

gaining crrency in the developmental discorse at that time

5overnment spport and encoragement for ,5:s contined in the


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,eed Society +1HCH0$ rathanaSama( +1HE=0$ SatyaShodhanSama( +1HF/0$ Arya Sama( +1HFC0$ the ,ational ;oncil for

6omen in India +1HFC0$ the Indian ,ational ;onference +1HHF0 etc. !he Society's *egistration Act +S*A0 was approved

in 1HE to confirm the legal stats of the growing %ody of non-governmental organi"ations.

In India$ it was the 1Fs which saw rapid growth in the formation of formally registered ,5:s and the process

contines to this day. 9ost ,5:s have created their respective thematic$ social grop and geographical priorities sch

as poverty alleviation$ commnity health$ edcation$ hosing$ hman rights$ child rights$ women's rights$ natral

resorce management$ water and sanitationG and to these ends they pt to practice a wide range of strategies and

approaches. rimarily$ their focs has %een on the search for alternatives to development thinking and practiceG

achieved throgh participatory research$ commnity capacity %ilding and creation of demonstra%le models. 6hen

we review some of the work done %y ,5:s over the past / decades$ we find that they have contri%ted greatly to

nation %ilding. 9any ,5:s have worked hard to inclde children with disa%ility in schools$ end caste- %ased stigma

and discrimination$ prevent child la%or and promote gender eBality reslting in women receiving eBal wages for

the same work compared to men. Dring natral calamities they have played an active role in relief and reha%ilitation

efforts$ in particlar$ providing psycho-social care and spport to the disaster affected children$ women and men.

,5:s have %een instrmental in the formation and capacity %ilding of farmers and prodcers' cooperatives and

women's self- help grops. Several ,5:s have worked hand in hand with the 5overnment to ensre that millions of

ot of school children are enrolled and contine their school edcation$ ths making the right to edcation a reality.

!he leprosy eradication programme was spearheaded %y ,5:s and today only residal leprosy remains in or

contry. ,5:s have implemented the KeevanDhara programme for creation of wells for safe drinking waterGpromoted commnity toilets for total sanitation$ and spported the p%lic health programs on immnisation and for

eliminating t%erclosis and malaria. !he mch cele%rated ,*


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It can %e noted that a great ma(ority of the ,5:s are small and a%ot three-forths of all ,5:s are rn entirely %y

volnteers. A%ot 1/ percent of the ,5:s have %etween 2 to C employeesG a%ot C percent have %etween E to 1

employees and only a%ot H.C percent ,5:s employ more than 1 people. According to a srvey condcted %y

society for articipatory *esearch in Asia +*IA0$ F/.= percent of ,5:s have one or no paid staff$ althogh across the

contry$ more than 1 million persons work as volnteers or paid staff at an ,5:. 9ore often ,5:s are registered as

trsts$ societies$ or as private limited non-profit companies$ nder Section- 2C of Indian ;ompanies Act$ 1CE. !hey

also en(oy income ta& e&emption. 7oreign contri%tions to non-profits are governed %y 7oreign ;ontri%tion

*eglation Act +7;*A0$ 1FE.

3: 5'%" %#e "'e e -ove#!%!ce c'%lle!-e$ +%ci!- NGO$8

In view of the emergence of a new paradigm of scaling p$ in which ,5:s are seen as catalysts of policy innovations

and social capitalG as creators of programmatic knowledge that can %e spn off and integrated into government and

market instittionsG and as %ilders of vi%rant and diverse civil societies$ it's imperative to critically analy"e the role of

,5:s in the process of development and nderstanding the challenges facing the Sector. !ransparency and

acconta%ility are key ingredients of 5overnance in the ,5: Sector as these determine operational efficiencies and

risk mitigation. :ver the years$ corporate sector has %een a%le to recogni"e and implement %est governance practices

throgh appropriate instittional framework. )owever$ the ,5: sector is yet to evolve any instittionali"ed

framework$ which cold potentially play an important role in overall development of the nation. ,5:s play an

increasingly active role in today's political and social arenas. ;ivil society organi"ations are increasing in nm%er all

over India. :f late$ some of the local and national ,5:s have %een fond involved in malpractices and acting

irresponsi%ly$ ths ndermining the credi%ility of civil society. It's a hge concern and poses a great challenge to the

development movement spearheaded %y ,5:s in the contry. !here is a hge flow of fnds into the non-

government organi"ation sector and this reBires prdence and good practices to maintain acconta%ility and

transparency to the %enefit of all stakeholders. Althogh$ ,5:s do internal aditing %t for more acconta%ility and

transparency$ it is advisa%le to go throgh e&ternal aditing also$ especially where p%lic fnds are involved. )ence$

isses of internal control mechanisms$ professionalism$ acconta%ility$ transparency and financial management mst

%e given impets. !he challenge is mltidimensional$ and is componded %y the4norganised' natre of the sector$

lack of reglatory frameworks and the fact that India %oasts of more than a million ,5:s of different roles$ strctres

and si"es. In particlar$ the Indian volntary sector rgently needs self-reglatory gidelines and transparency

mechanisms to increase the trst and awareness as to how the philanthropic fnds are %eing tilised. !his is a critical

challenge that creates a %arrier to raising fnds and capital for the sector. !he general lack of transparency in thefnctioning of a large proportion of ,5:s leads to aversion in donating fnds for charita%le cases since the general

p%lic is largely cynical a%ot the 4genineness' of the non-profit spirit of the sector. !he stringent governance

standards of an ,5: will facilitate the effective management and increase the acconta%ility to its stakeholders

inclding donors$ the government and the commnity. It is in the self-interest of the ,5:s to reali"e the fact that to

implement a strctre of 4corporate governance' principles wold provide the real vale to the stakeholders. Also$ this

wold ena%le to track the potentially d%ios sorces of fnding coming in for the volntary sector M an aspect which

has gained impets in the wake of the increased nm%er of terror attacks and e&tremist activities. *ecently$ this

#nion )ome 9inistry has identified some ,5:s as secrity threat to the contry. Sch secrity considerations have

nderscored the rising need of improving the governance practices in the Indian ,5:s and e&ercising %etter

reglatory mechanisms$ disclosre norms$ and management processes inclding financial management and %dgeting

systems as well. 9oreover$ in the larger interest going %eyond the secrity considerations$ the impets has to %e on

inclcating a cltre of inclding performance goals$ condcting financial and performance adits$ and reforms forincreasing the operational acconta%ility and transparency in the eyes of the p%lic$ volnteers$ donors and other

stakeholders.

S--e$"io!$:

!he implementation of a strategic framework is essentially important in the management of an ,5:. !he

endorsement of sch a framework %rings in professionalism and internal control mechanisms$ which frther makes

the organi"ation's performance more effective. Developing strategies also inclde esta%lishing a mechanism of

consistent monitoring of whether they are %eing implemented and linking the reslts to the organi"ation's goals.

!here is need to %olster p%lic confidence in the volntary sector %y opening it p to greater p%lic scrtiny. !he

5overnment will encorage ;entral and State level agencies to introdce norms for filing %asic docments in respect

of ,5:s$ which have %een receiving fnding %y 5overnment agencies and placing them in the p%lic domain +with

easy access throgh the internet0 in order to inclcate a spirit of p%lic oversight.


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%lic donation is an important sorce of fnds for the ,5: sector and one that can and mst increase s%stantially.

!a& incentives play a positive role in this process.!he 5overnment cold simplify and streamline the system for

granting income ta& e&emption stats to charita%le pro(ects nder the Income !a& Act. At the same time$ the

5overnment might consider tightening administrative and penal procedres to ensre that these incentives are not

missed %y paper charities for private financial gain.

!he 5overnment shold encorage all relevant ;entral and State 5overnment agencies to introdce pre-service and

in-service training modles on constrctive relations with the volntary sector. Sch agencies need to introdce time

%ond procedres for dealing with the V:s. !hese cold cover registration$ income ta& clearances$ financial

assistance$ etc. !here mst %e a formal systems for registering complaints and for redressing grievances of ,5:s.

!he 5overnment shold encorage setting p of Koint ;onsltative 5rops 7orms or Koint 9achineries of

government and volntary sector representatives$ %y relevant ;entral Departments and State 5overnments. It also

needs to encorage district administrations$ district planning %odies$ district rral development agencies$

"illaparishads and local governments to do so. !hese grops cold %e permanent forms with the e&plicit mandate to

share ideas$ views and information and to identify opportnities and mechanisms of working together. !he

5overnment also might introdce sita%le mechanisms for involving a wide cross-section of the volntary sector in

these 5rops7orms.

Si!- Up:

6e are entering into an important phase where the 12th five year plan is %eing worked ot and there are many

targets that the government intends to achieve with the active colla%oration of V:s. !herefore$ it is important to

condct an effective review or report card of the ,ational olicy with specific recommendations. !hese

recommendations cold %ecome an agenda for all Volntary :rgani"ations$ lanning ;ommission$ state governments

and national 9inistries.


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rearers$ salt workers$ gm collectors$ cooks and vendors with the primary o%(ective of +a0 increasing their income and

assetsG +%0 enhancing their food and ntritional standardsG and +c0 increasing their organisational and leadership

strength. !he overall intention was to organise women for fll employment. In order to %roaden their access to

market and technical inpts$ these primary associations were encoraged to form federations like the 5(arat State

9ahila S


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SIDI:

Small Indstries Development 8ank of India +SID8I0 lanched its micro finance programme on a pilot %asis in 1=

sing the ,5: 97I model of credit delivery wherein sch instittions were sed as financial intermediaries for

delivering credit to the poor and nreached$ mainly women. earning from the e&perience of the pilot phase$ SID8I

reoriented and pscaled its micro finance programme in 1. A specialised department vi". 4SID8I 7ondation for

9icro ;redit' +S79;0 was set p with the mission to create a national network of strong$ via%le and sstaina%le 9icro

7inance Instittions +97Is0 from the informal and formal financial sectors. S79; serves as an ape& wholesaler for

micro finance in India providing a complete range of financial and non-financial services to the 97Is so as to facilitate

their development into financially sstaina%le entities$ %esides developing a network of service providers and

advocating for appropriate policy framework for the sector. S79; is implementing the ,ational 9icro 7inance

Spport rogramme +,97S0. !he overall goal of ,97S is to %ring a%ot s%stantial poverty elimination and

redced vlnera%ility in India amongst sers of micro-finance services$ particlarly women.

P#iv%"e I!i"i%"ive$:

!hogh$ government efforts have played a ma(or role in advancing the S)5 movement in the contry$ there have

%een a large nm%er of volntary organisations +,5:s0 which too have facilitated and assisted S)5s in organi"ing

savings and credit in different parts of India. S


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immova%le property$ sch migrant workers do not have any formal docment to prove their domicile in the city. 8t

the overall economic and social well-%eing of the city is closely linked with the condition of this section of the city

dwellers. In the a%sence of any docmentary proof$ it appears that this class of people do not have access to

organised financial services. As per the e&isting stattory provisions$ ,A8A*D's mandate is to provide micro-finance

facilities only to rral and semi-r%an areas. 8ranches of the mainstream 8anks too$ thogh$ eBipped with

manpower and technology$ are not keen to service this sector.


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A*;-2 has made the following recommendations

!he 9icro 7inancial Sector +Development and *eglation0 8ill$ 2F needs to %e amended to inclde the following

sggestions-

i. !he scope of 9icro-finance Services shold %e s%stantially widened to cover credit savings$ insrance$ pension

services$ money transfer$ isse discont of warehose receipts and ftre option contracts for agricltral

commodities and forest prodce.

ii. !he activities of Section 2C ;ompanies to the e&tent they concern micro-financial services as descri%ed nder the

proposed 8ill shold also %e %roght nder the prview of this legislation. )owever$ for their management and other

fnctions$ they will contine to %e governed %y the provisions of the ;ompanies Act.

iii. !he isse of interest rate charged %y the 97Is shold %e left to the *eglatory Athority which is %eing created

nder the proposed 8ill.

iv. It shold %e ensred that if 97Is are allowed to handle thrift savings and money transfer services$ they wold do

so only as %siness correspondents of commercial 8anks.

REERENCES:

Mohit Bhattacharya- Social Theory and Development Administration ARC-2 Report 9- Social Capital Yojana Nov 2!"" iss#e on N$%s

Cop#i-'" 1 2 Vi$io! IAS

All rights are reserved. No part of this document may be reproduced, stored in a retrieval system ortransmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise,

without prior permission of Vision IAS

185cf432 the role of ngos shgs development processes www.visionias.in

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