Panchayath, Foreign Funds and Participatory Democracy

Posted on March 12, 2014 by SRRF

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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Comparative Analysis of New Schedule VII and Old Schedule VII

Posted on March 11, 2014 by SRRF

CSR provisions of new Companies Act have been notified and will become effective 1st April 2014. Thus all companies who qualify for CSR based on accounts of Mar’14 would be required to comply with CSR provisions. A company once qualifies for CSR would continue at the minimum for three years. CSR activities have been identified in Schedule VII.

Major change effected is that the Ministry had replaced the earlier Schedule VII (Refer http://blog.srr-foundation.org/?p=1505)   with a new one, which is more comprehensive and covers a number of additional issues omitted in earlier version. Given below is each clause of the new schedule VII alongwith comparative analysis with previous Schedule VII.

(i) eradicating hunger, poverty and malnutrition, promoting preventive health care and sanitation and making available safe drinking water;
  • Earlier version only covered extreme hunger.
  • Malnutrition was not specifically covered earlier, unless it could have been covered under then clause (iv) – reducing child mortality.
  • Preventive Health care is much broader than earlier version which only covered HIV/AIDS, Malaria and other diseases. Thus it now even covers activities relating to preventive health and not just curative.
  • Earlier version did not cover sanitation and safe drinking water specifically and was open to interpretations if such activities could have been covered under environmental sustainability.
(ii) promoting education, including special education and employment enhancing vocation skills especially among children, women, elderly, and the differently abled and livelihood enhancement projects;
  • Now education includes special education for children, women and elderly thus seems to cover all non-formal education, adult literacy, etc.
  • A major boost for differently able. All form of education and vocational skills covered for them. However doubts linger on, if any other initiatives for such persons, support for institutions who are researching on such specific diseases, or institutions who research/ provide products to assist such persons, are covered. Only possibility could be the general clause of ‘promoting preventive health care’ under (1) above.
  • Employment enhancing vocation skills (which earlier was left as
    such thus giving scope for different interpretations) has now been expanded to cover children, women, elderly and differently-abled.
  • It also covers livelihood enhancement projects (thus various
    livelihood projects which was not certain earlier. One could interpret it to cover even microfinance projects.
(iii) promoting gender equality, empowering women, setting up homes and hostels for women and orphans; setting up old age homes, day care centres and such other facilities for senior citizens and measures for reducing inequalities faced by socially and economically backward groups;
  • This clause which earlier only covered promotion of gender equality
    and empowering women has been expanded to cover setting up homes and hostels for women and orphans.
  • One of the major criticism of the earlier version was that along with disability it did not Aged. The clause now specifically allows setting up old age homes day care centres and such other facilities for senior citizens.
  • It allows any measure to help reduce inequalities faced by socially and
    economically backward groups (read SC/ST) groups. However it is open to question whether it could include minorities which may be considered socially and economically backwards.
(iv) ensuring environmental sustainability, ecological balance, protection of flora and fauna, animal welfare, agroforestry, conservation of natural resources and maintaining quality of soil, air and water;
  • Earlier clause on ensuring environment sustainability has now been qualified to specify the type of projects likely to be covered under these activities. However the clause seems to cover a large number of areas, including maintaining quality of soil, air and water.
  • Following additional areas covered:
(v) protection of national heritage, art and culture including restoration of buildings and sites of historical importance and works of art; setting up public libraries; promotion and development of traditional arts and handicrafts;
(vi) measures for the benefit of armed forces veterans, war widows and their dependents;
(vii) training to promote rural sports, nationally recognised sports, paralympic sports and Olympic sports;
(ix) contributions or funds provided to technology incubators located within academic institutions which are approved by the Central Government;
(x) rural development projects.

Following clause has been modified to exclude funds set-up by the State Govts. Original clause included similar funds set-up by the State Govt. Perhaps this is a reaction of the central Govt to demands made by various state govt. that the CSR funds should be transferred to various state govts.

(viii) contribution to the Prime Minister’s National Relief Fund or any other fund set up by the Central Government for socio-economic development and relief and welfare of the Scheduled Castes, the Scheduled Tribes, other backward classes, minorities and women;
  • A vague sounding social business projects has been omitted.

_____________________________
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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Treatment of money deposited during opening of the FCRA account?

Posted on March 10, 2014 by SRRF

Dear Sir
Greetings !

Can anyone suggest me on the following:
Our total FC fund includes some amount which belongs to our own. It means it includes the minimum balance in FC Bank account when opened and cumulative interest there on from years together. Now my question is how to utilize the same portion?

Kindly suggest .

~~~~~~~~~~~~~~~~~~~~~~~
Debi Prasad Panda,
Finance Officer,
Orissa Voluntary Health Association,
Plot No. 165, Laxmisagar, Bhubaneswar,
Odisha, Pin – 751 006.

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Can a Donor take over assets purchased from grant funds

Posted on March 1, 2014 by SRRF

Dear Sir,

We are a principal recipient of foreign funds and we have given sub grants to some organization.Out of the subgrant money , the subgrantee have purchased several assets which includes Furniture and equipment.

As part of the contract , it is mentioned that Assets can be taken over by principal recipient after the end of contract period .

My question is that can we (principal recipient) take over the assets bought by sub grantee out of these funds? ( the invoice of the assets is in the name of sub grantee).

Regards,

Jiwan

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Is separate PAN required for LIC Gratuity Scheme?

Posted on February 26, 2014 by SRRF

Greetings from Satvik : Promoting Ecological Farming. 
 
We are NGO working in Kachchh district. Recently we have opted Employee Group Gratuity Scheme of LIC. We were advised to seek approval under Part C of the Fourth Schedule of the Income Tax Act from office of the Income Tax Commissioner.
 
Office of the Income Tax Commissioner has asked us to obtain separate PAN Card (than the NGO) for EGG and file annual return as ITR – 7.
 
Since long we are in NGO field. We have observed that this is not in practice. Please suggest does it mandatory and explain your view.
 
Warm regards,
 
Nikita Gor
—
For,
Satvik : Promoting Ecological Farming
A-59, Changleshwar Society
Mundra Relocation Site
Bhuj – Kutch (Gujarat) 370001

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9th ASER Report – Lessons to be learnt ……..(3)

Posted on February 25, 2014 by SRRF

It is good to see a lot of interest in this series on ASER Report, as evidenced by a number of responses to earlier two posts. In today’s post certain pertinent issues are highlighted on lessons to be learnt from the report.

  • Decline in the learning standards has become a consistent trend and there is a need to go deeper in the reasons for the same to take corrective actions. Obviously teachers are not able to get their students to learn, one needs to go into the reasons.

–  Are they overburdened by the heavy syllabus required under RTE, thus focus has shifted from learning to completion of syllabus ?

–   Has Continuous Comprehensive Evaluation (CCE) format under RTE, where no child can be detailed till VIII, is affecting the learning by the children ?

  • Another important aspect one learns from this Survey is that enrolment in private schools is rising. All India : 29% (2006: 18.7%). Manipur & Kerala have more than 2/3rd in private schools. Is learning level in private schools better. Data in the report seems to suggest so, in 2010, 33.2% children in class III studying in Govt schools could subtract, compared to 47.8% in private schools. However in 2013 the gap has widened with only 18.9% in Govt school compared to 44.6% in private school. Question one could raise is spending on Infrastructure helping learning?

_____________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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9th ASER Report highlights……..(2)

Posted on February 17, 2014 by SRRF

Bad news of falling standards of education – Statewise status:

Class III-V

– Students who can read text of Class I

All India 55%

TOP 5

BOTTOM 5

Mizoram

80.2%

Madhya Pradesh

38.1%

Meghalaya

80.0%

Jharkhand

45.4%

Manipur

78.7%

Assam

46.4%

Himachal Pradesh

78.5%

Uttar Pradesh

47.8%

Kerala

77.8%

Bihar

47.9%

– Students who can subtract

All India 39.7%

TOP 5

BOTTOM 5

Mizoram

77.8%

Madhya Pradesh

22.3%

Sikkim

72.3%

Chattisgarh

27.7%

Manipur

67.2%

Maharashtra

31.7%

Punjab

66.6%

Gujarat

32.3%

Himachal Pradesh

65.3%

J&K

34.9%

Class VI-VIII

– Students who can read text of Class II

All India 65.7%

TOP 5

BOTTOM 5

Kerala

87.9%

Puducherry

49.8%

Himachal Pradesh

86.4%

Madhya Pradesh

51.2%

Manipur

83.1%

Assam

52.6%

Mizoram

82.5%

Tripura

55.3%

Punjab

82.0%

Tamilnadu

56.9%

– Students who can divide

All India 38.9%

TOP 5

BOTTOM 5

Mizoram

72.3%

Assam

19.0%

Sikkim

63.3%

Madhya Pradesh

25.2%

Manipur

62.6%

Gujarat

26.8%

Punjab

61.7%

Chattisgarh

26.9%

Himachal Pradesh

59.1%

Tamilnadu

28.2%

_____________________________
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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9th ASER Report highlights

Posted on February 14, 2014 by SRRF

Recently 9th Annual Survey Education Report report conducted by Pratham has been released. It has several important and interesting findings. SRRF Dialogue would undertake a series of releases on the important findings of the report.

First the good news:

  • Over 96% children have been enrolled in schools in the age group of 6-14. This result is consistent for last several year reports, indicating a major achievement under RTE of getting the Children to schools.
  • Infrastructure in schools has improved significantly over the years.

– 87% provide mid-day meal
– 76.3% schools have office-cum-store
– 73% have drinking water
– 62% offer a playground
– 62% have a useable toilet (from 47% in 2010)
– 53% provide girl students a separate useable and unlocked toilet (from 33% in 2010)
– 56% are protected by a boundary wall

  • On the quality aspect, while there are plenty of bad news, again first the good news. Pupil Teacher Ratio (30:1) has improved from 38.9% schools meeting this norm in 2010 to 45% in 2013.

Bad news is that there is decline in almost all learning standards from reading to simple arithmetic.

  • Only 47% children of V standard could read books of II standard. This has consistently declined from 53% in 2009. In Govt schools only 41% could read (a decline from over 50% in 2009).
  • Only 19% students of class III could subtract (from 36.5% in 2009). In private schools this test could be done by almost 50% student though there too some decline has taken place but it less steep. (from 44.6% in 2009).
  • In govt schools only 21% could divide (from 36% in 2009). While combined private and Govt schools around 26% could divide (from 38% in 2009).
Tomorrow how states have performed on these important parameters.

_____________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

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FCRA Prior Permission – Need a Clarification

Posted on February 7, 2014 by SRRF

We have an National Outreach Programme Core team project to fund the Core team @ Rs 31 lakhs pa initially.  We asked the donor in May 2013 for a 5 year MOU but sent him a one year budget of Rs 31 lakhs for period July 13 – June 2014  The donor agreed to 1 year and Rs 25 lakhs and we have a 1 year MOU with him for the Rs 25 lakhs and the signed MOU came back only in January 2014.

We are now applying for the FCRA Prior Permission. 

Qn 1. If we apply for Rs 25 lakhs or even Rs 31 lakhs one year project, attaching the MOU and letter of commitment from the Donor, then we can’t apply again for another 6 months till September even if we find another donor. Is that correct?

Qn 2. If we put in the project for 2 years,( till we get our permanent FCRA registration,  then we can add more donors to the same project before 6 months.  Is that correct? Please clarify

Many thanks

Arvind Kumar

Posted in FCRA, TAX, LEGAL | 4 Comments

Liberal interpretation of investment by Trust

Posted on January 30, 2014 by SRRF

As many of us would be aware that a Trust’s income as per S. 11 is exempt if it obtains S. 12A exemption certificate. However this does not cover capital gain and Trust is subject to taxation on the same. Of course a Trust like anybody else can take benefit of the exemptions available under the Act.

In a recent case, a Trust had a capital gain on sale of an immovable property. To mitigate the same it invested in REC Bonds (Relief under S. 54EC). However the investment in the bonds was in the name of the Trustees and not the Trust. ITO as well as Commissioner disallowed this investment and charged tax on the full capital gain amount. However Ahmedabad Tribunal decided in the favour of the Trust, stating that more liberal meaning has to be taken as long as funds had been transferred from the bank account of the Trust, even if investment was in the name of the Trustees.

This decision could be useful for such trusts / societies who make such mistakes for one reason or other.

However one needs to be careful while liberally using this judgment, since the tax authorities could use S. 13 (2) for disallowing such exemption.

_____________________________ 
Socio Research & Reform Foundation
(A Non Government Organisation)
512 A, Deepshikha, 8 Rajendra Place,
New Delhi – 110008

Posted in FCRA, TAX, LEGAL | 1 Comment