Panchayath, Foreign Funds and Participatory Democracy

Dear All,

  1. Can A Panchayath receive Foreign Funds as Grants without any FCRA or such registration?
  2. Can A Panchayath receive Foreign Funds as Loan without any FCRA or such registration?
  3. The New Legislation on Multi State Societies and even the present one need to have mandatory registration of Voluntary Organisations with the Panchayath where they desire to work and report to them. The Registration should be automatic and not the discretion of the respective Panchayath.
  4. For Voluntary Organisations, it will be better they facilitate direct transfer of their funds to the Panchayath.
  5. We should build Panchayath to Panchayath Development cooperation in the State and Country.

For many years, we are curious about these questions. Can someone clarify the present legal position? Can we take it forward to achieve desired legal climate fr such possibility with reasonable State controls as we Voluntary Organisations have?

Regards,

V.B.Chandrasekaran
Chatti Mahatma Gandhi Aashramam
Chatti Post, Chinthur Mandal
Khammam District, Andhra Pradesh
Pin Code: 507129

  

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4 Responses to Panchayath, Foreign Funds and Participatory Democracy

  1. hemen parekh says:

    Don’t Ask ” How ” ?

    At the bottom of the 42 page Election Manifesto of BJP , released yesterday , I tried to search , if in very small print somewhere , there was a footnote which read ,

    ” Please , don’t ask how we plan to implement these promises ;
    From where we plan to find all the money to execute these projects ”

    Here are my back-of-the-envelope estimates of what some of the MAJOR projects might cost :
    ————————————————————————————
    PROJECT ……………………………… Approx Cost ( Rs Lakh * Crores )
    ————————————————————————————-
    > 100 Mega Cities…………………… 90
    > Interlinking of Rivers……………… 60
    > Sagar Mala of Ports……………….. 30
    > Highways ( 25,000 Km )………….. 50
    > Housing ( 100 mill units )………… 100
    > Rivers Cleaning…………………….. 10
    > Other Infra Projects……………….. 100
    * Freight Corridors
    * Gas Grids
    * OFC Network
    * Quadrilateral Bullet Trains
    ————————————————————————————
    Total ……………………………………Rs 430 Lakh Crores
    ————————————————————————————
    Admittedly , not all of these money will be required in the very first budget that NaMo government ( – of course , only if voted to power ! ) , would present by end June 2014

    But a problem does not go away by postponement !

    There is only ONE viable solution to the FUNDING problem , viz:,

    > Union Government must NOT even try to fund these projects !
    There is NO WAY , it can find these kind of money thro taxation !
    There will be a revolt !

    ANSWER

    > Make it possible for the PUBLIC to invest into these projects by ” owning ”
    these projects – and earn a reasonable ” tax-free ” return on investments
    ( Bonds ? ) in these projects

    > Towards this end , create various INFRASTRUCTURE SPVs

    > Immediately modify PERSONAL INCOME TAX regime as follows :

    > Up to Rs 5 lakhs………………… NIL
    > 5.1 – 10 lakhs………………….. 8 %
    > 10.1 – 20 lakhs…………………. 6 %
    > 20.1 – 50 lakhs………………… 5 %
    > 50.1 – 100 lakhs………………… 3 %
    > Above 100 lakhs…………………. 1 %

    What is likely to happen with such ” INVERSE TAXATION ” regime ?

    Following few things :

    > Total personal tax payer base will go up dramatically from current 4
    crores tax-payers

    > with this ” INVERSE TAX REGIME ” , there will be no incentive to evade
    taxes and to generate ” BLACK MONEY ”

    There will be no resistance to accept ALL payments by cheque / electronic
    clearance

    The more you disclose as your income , the less you pay by way of taxes

    ( Of course , incrementally )

    > For a change , we will learn to reward honesty / efficiency / productivity !

    No need to bribe those Income Tax officers !

    > Suddenly , lakhs of crores of BLACK MONEY will become WHITE MONEY

    > There will be a huge surge in bank deposits ( – even with , the inevitable
    lower interest rates )

    > Banks will be awash with funds to finance businesses / infrastructure
    projects etc , encouraging entrepreneurs / self-employed to set up new
    businesses ( at 2 % interest rates of loans ) and generate millions of jobs

    In any case , BJP manifesto promises :

    > Rationalization and simplification of the tax regime – which is currently
    repulsive for honest tax payers

    > The process of bringing black money to India , what belongs to India , will
    be put in motion on priority

    > Minimize scope for Corruption

    Narendrabhai ,

    Here is your chance to ditch the ” Historical Baggage ” into the Indian Ocean
    and come up with an INNOVATION that will take India ahead of China !

    If President Kubitschek of Brazil ( 1956-61 ) – son of a poor salesman – could construct Capital city BRASILIA and a 1500 Km highway , in 41 months , surely , you can do better , 57 years later !

    * hemen parekh ( 08 April 2014 / Mumbai )

  2. V.B.Chandrasekaran says:

    But any development agency are (Funding organization) to support any Panchayath, The particular panchayath must take prior permission from MoH.

    We as a Voluntary Organisation with FCRA (Girijana Seema Welfare Association) have never taken any permission from MoH to work with Panchayath. Yes, we had sub accounts and gave funds to them without minding the legal implications. Now that a debate is possible, the question comes.

    LAW is LOGIC. By what Subhash Mittal says \"FCRA is not applicable to a statutory body where two conditions are fulfilled, (1) constituted through a central / state Act and (2) which is subject to compulsory audit of CAG. Although often Panchayaths are subject to Local Fund Auditor and technically not a CAG. \" logically, we do not require MoH permission to work with or even give funds top Panchayaths
    V.B.Chandrasekaran
    Chatti Mahatma Gandhi Aashramam
    Chatti Post, Chinthur Mandal
    Khammam District, Andhra Pradesh
    Pin Code: 507129

  3. Subhash Mittal says:

    Dear Mr Chandrasekran,

    FCRA is not applicable to a statutory body where two conditions are fulfilled, (1) constituted through a central / state Act and (2) which is subject to compulsory audit of CAG. Although often Panchayaths are subject to Local Fund Auditor and technically not a CAG. However Local Fund Auditor, functions under the overall Technical Guidance and supervision of CAG, hence it can be stated that PRI bodies are subject to CAG audit. Hence FCRA is not applicable to Panchayaths. You may refer to relevant circular (Gazette Notification S.O. 1492(E) dated 01.07.2011) on SRRF or FCRA website.

    I believe most other queries raised by you are basically linked to the applicability of FCRA to panchayath, if the Act is not applicable to such bodies then they can function free of FCRA restrictions.

    warm rgds

    subhash

  4. Vinay Kumar Arepally says:

    Dear Chandrasekaran,

    You have raised very unique question,

    As Panchayath can receive individual donation or Grants from foreign as Grant for development of Panchayath without FCRA.
    But any development agency are (Funding organization) to support any Panchayath, The particular panchayath must take prior permission from MoH.

    Thank you

    Vinay Kumar Arepally
    Executive Director
    TOUCH
    Mahabubnagar, Andhra Pradesh

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