Summary of the lecture by Mathew Cherian
Is financial viability of the Voluntary Sector a mirage? The way forward
PART-I
To begin with I would like to thank SRRF for the honour of inviting me to deliver the first Vijay Sardana Memorial Lecture. I would like to remember Mr. Vijay Sardana, a gentleman and a noble soul, a fellow traveller whom I met 27 years ago when I was with Oxfam and he was with Plan International and a warm friendship we shared. I acknowledge the presence here of Mrs Sardana and family.
In his own quiet way, Vijay Sardana began by experimenting with an important area of financial viability by promoting “KOSH” in ASSEFA, Tamil Nadu, which was one of the big forerunners of the SHGs. The KOSH savings movement predates Grameen Bank and other models which are popular now. Not much is written about it but is a working model. I am glad that Bunker Roy founder of SWRC Tilonia and my hero in the sector from my younger days is present in the audience. He should have been delivering this lecture.
Vijay Mahajan who set up BASIX said “he learnt all about microfinance from ASSEFA’s KOSH and its learnings”. This was about 30 years ago and the world was yet to know of the Grameen Bank model but it was done in India. ASSEFA was one of the few organisations which reached viability and still continues its work in southern Tamilnadu around Madurai.
Vijay Sardana was a forerunner in his thinking on the viability of the sector much before his time. I would like to commend him on his contribution and it is appropriate that this memorial lecture is dedicated to viability of the sector.
Let us acknowledge the contribution of the voluntary sector which has grown from small beginnings into a huge sector in the new millineum. Indian freedom movement in 1857 got support from in the Indian gangetic plain from civil society as we know it, religious organisations both Muslim and Hindu. Societies Registration Act 1860 was formed to regulate these organisations.
I quote from my book on the non Profit sector “A million missions” “The sector has grown from these small beginning to 3.1 million NGOs and an annual income of Rs 72,792 crores and employs 2.7 million paid workers. The total workforce exceeds 18.2 million workers bigger than the entire public sector workforce in India. Civil society sector has benefitted from private philanthropy”. This data is from the Government’s study of Non profit establishments carried out in 2012 by the Ministry of Statistics and Programme Implementation.
While over a larger time-frame, the bulk of the sector continues to grow, but my observations over the last decade & case studies, point to the fact that non-profits are facing tremendous problems and the last 5 years of NDA rule it has been particularly distressing.
I quote 5 major news items to illustrate this point in the last five years.
- Removal of 100 % tax exemption to NGO’s though the revenue foregone was a meagre 31.6 crores in a 3.1 trillion dollar economy which demonstrated the small minds of the present ruling dispensation.
- Cancellation of 10,600 NGOs from the FCRA list in 2014 and another 5000 plus in 2017 .
- 21 foreign donors placed on the banned list and an additional 15 of them on the watch list. RBI has become stricter than ever before on any foreign transfers to NGO’s. As a aside I think RBI should focus equally on banks & companies!
- A Supreme Court case on stricter regulation and audit of the voluntary sector. It also relies on some facts which are based on an ill informed PIL with little or no resistance from the non profits. There is a clear lack of advocacy by the sector which lacks the skill & PR of chambers of commerce like CII or FICCI.
- The amendment brought in by a money bill that foreign company’s donations are no longer foreign money but Indian money that granted retrospective remedy to donations to political parties that recd these donations. I ask whether these rules could have similarly come to the rescue of non-profits? Clearly a case of double standards that only a ngo like ADR could challenge & survive.
The current discourse is anti civil society and the government increasingly paints the human right defenders as anti national, and coined a new word “Urban Naxal“. This makes working in the area of human rights difficult for many non-profits. The regulatory environment has become stricter and scrutiny is growing I would say selectively. However my personal opinion is that it has made us much stronger.
So why is the voluntary sector in India so critical?
We have had so many important achievements in the sector, some of which are ‘Right to Information (RTI ) Act’, in microfinance, in watershed programmes and livelihoods. Little is known that the ASHA worker is born of an NGO experiment, the Anganwadi worker came up from NGO work. The NREGA was a replication of “food for work“ programme organised by NGOs in 70’s and 80’s. Very little is talked of the contribution of Aruna Roy in RTI and Nikhil Dey in MNREGA, Rajender Singh the waterman of India on improving watersheds in dry land areas and reviving old rivers. I can talk of several and even in Vijay Sardana’s days in AFPRO the India Mark 2 pump for drinking water was developed which is the mainstay in many villages in India, Africa and other SE Asian countries. The Indian voluntary sector needs to be celebrated rather than be pilloried as being done today which along with democracy has kept our freedoms.
A historical look at the sector to understand the viability of the voluntary sector.
I would like to give four examples to prove my point.
Lala Lajpat Rai started the Punjab National Bank in Lahore and this year they are celebrating 125 years of the Bank, When He migrated to India along with the Bank large parts of Lajpat Nagar named after him were given as compensation. However he set up a voluntary organisation called Servants of the people society to rehabilitate the refugees who came from West Pakistan and many activities were started. They were joined by Purushottamdas Tandon, Congress President and who served them for many years. The good library there is named after Purushottam Tandon and the Main office is called Lajpat Bhawan. They raise funds through a Nature clinic, an annual fair, fees from the auditorium and also run a school for underprivileged children and sell products and masalas and have earned a huge branding for their spices.. This society Servants of People Society has survived for 70 plus years and is still serving the community. They also run a retirement home “ Godhuli “ in Dwaraka which is a another fine institution.
A second example of a thriving non profit is an organisation called SPIC MACAY in the field of art and culture and carries out programmes on classical dance, music and also on specific cultural events. It is an organisation run by volunteers and most of the programmes are run on a voluntary basis. The founder Ashok Seth is a full time Professor in IIT Delhi.
A third example is ASSEFA, a Gandhian Organsiation which originated from the Bhoodan movement, which was started by Acharya Vinobha Bhave . ASSEFA runs schools in rural areas, organised several savings and credit organisations federated into Kosh and also a fine dairy plant near Madurai supplying fresh milk to the city.
The fourth example is one of the organisations started by HelpAge India called the “Elders for Elders Foundation” after the Tsunami in 2004 in Tamilnadu. It began with starting elder SHGs of the Tsunami victims and the savings were accumulated to begin livelihood enterprises. Today they are federated into 4 district federations and the EFE runs on viable funding from NABARD and NABFIN. Today it is a 30 crore organisation with no external funding and runs health programmes and micro finance programmes which are completely viable. We have proved that there is a second demographic dividend after 60 and elders can still contribute to the local economy and to the GDP. All the four examples of organisations which run on internal funds raised within the country and are moving forward in their work including HelpAge India, my organisation