Context: This article is based on the news “We must bust myths around the social service sector” which was published in the Live Mint. The Civil Society Organisations played an important role in the development Process. However,  the idea that interventions can be self-sustaining is unrealistic.

What are Civil Society Organisations (CSOs)?

• About: Civil Society Organisations are organized voluntary non-state institutions operating mostly on a non-profit basis. 
• Objective: The main focus of the Civil Society Organisations is service delivery, particularly access, quality and accountability.  They play integral roles in the successful functioning of democratic governance systems and are active stakeholders in social, economic, and cultural activities.
• Membership: They are formed and led by the citizens to champion their collective or common interests and concerns of the members, specific target groups, or the general public. 

Roles Played by Civil Society Organisations (CSOs) in Society

• Support Service Delivery

• • They extend support toward effective and timely delivery of basic services.
  • Civil Society Organisations ensure this through awareness generation, evidence, collaboration, and advocacy. 
  • Smile Foundation is a child education NGO aiming to empower underprivileged children by providing education and healthcare support.

• Policy Formulation: 

  • Many Civil Society Organisations today focus on stronger consultation and collaboration mechanisms with the government to support policy action plans and legislation.
    • The Mazdoor Kisan Shakti Sangathan (MKSS) spearheaded the right-to-information movement in Rajasthan – and subsequently, throughout India.

• Research and Evidence

  • Civil society plays a significant role in the policy landscape with the growth of research and evidence in India.
    • Civil Society Organisations gather relevant data from the grassroots, implement and refine programs, and drive decisions rooted in evidence. 
    • For Example The Association for Socially Applicable Research (ASAR) is a nonprofit company that works towards research, awareness and action on social issues.

• Innovation

• • Civil society in India is seen as a key player in developing and scale innovative models of change.
  • Given the diverse range and scope of Civil Society Organisations, they have a unique strength to pilot test models, share good practices, and replicate through example. 
    • Ex-The State Government of Karnataka scaled the Mysore Resettlement and Development Agency’s innovative models of self-help groups and watershed management.

• Civil Society Organisations working as Active Partners of Development: 

• • They fill the development gaps left behind and help the community at the grassroots level.
  • Ex-CSO engaged in MGNREGS to organize the workers into formal groups/labour collectives to improve their participation in implementation and to ensure the provision of entitlements provided under the Act.
    • NGOs like Pratham Oxfam India provide education to children in rural areas.

• Empowering Marginalised Sections

  • These organizations work relentlessly to fight social and gender inequalities.
    • The Ex-Milaan Foundation is working for an inclusive and equal world for girls. 
    • So far, 40,000 children and their communities have benefited through Milaan Foundation.

• Mobilization of the Citizens and Resources

  • They involve communities in development works by engaging them in planning and designing the same. 
    • They use community resources for initiatives like building community infrastructure, houses, and toilets, and in providing basic services like water, electricity etc.
    • Society for the Promotion of Area Resource Centers (SPARC) NGO is working on housing and infrastructure issues for the urban poor.

Concerns Related to Civil Society Organisations in India

• Administrative Expenses: The FCRA Act limits administrative expenses to 20% posing a significant challenge for NGOs engaged in research, advocacy, capacity building, networking, and model development for social innovations. 
  • These activities often incur substantial meetings, salaries, and travel costs, categorizing them as administrative expenses. 
  • Such constraint of administrative spending may render the existence of an organization unfeasible. 
• Multiple Regulatory Authorities: There are multiple regulatory authorities for the regulation of the Civil Society Organisations sector leading to overlapping compliance requirements.
  • Ex-In the office of the charity commissioner regulates Western India, trusts and societies, and non-profit companies by the Registrar of Companies, whereas the income tax authorities regulate the matters of tax exemption.
  • Moreover, the Ministry of Home Affairs regulates the flow of funds from foreign sources to NGOs and Civil Society Organisations.
• Lack of Uniformity and Standardization: Since ‘charity’ is a state and not a central subject in India, some states have excessive regulations while others have virtually none at all. 
  • Ex- In the states of Maharashtra and Gujarat, the charity commissioner requires regular filing of  ‘change reports’, as well as prior permission for buying and selling immovable property. 
  • On the other hand, the National Capital (Delhi) and some other states do not have a charity commissioner. 
  • New Civil Society Organisations  attempt to seek registration in New Delhi or such territories where they can bypass the regulatory authority.
• Increased Compliance Norms: The increasing compliance requirements for CSR donations increased transaction costs. 
  • CSR donations require escrow account maintenance, impact analysis,etc.
  • International non-profit contributions declined by 30% in the past five years, driven by the changes in the FCRA. 
• Anti-National Activities: It has been alleged that some Civil Society Organisations have been involved in anti-national activities by taking foreign funding.
  • Many NGOs have been assisting Maoists-Naxals and pro-Pakistan organizations, carrying out anti-India activities directly or indirectly by taking foreign funding.
• Accountability Issues:  Accountability and transparency in financial matters has been found to be lacking. 
  • There have been increasing incidences of misuse of funds by these organizations. 
  • In January 2017, the Supreme Court of India called for an audit of nearly 30 lakh NGOs as the NGOs failed to give an account of expenditure made out of the fund they had received.

Challenges Civil Society Organisations face in Acting as Alternate Public Service Delivery in India

• Concern with Sustainability: The changes and improvements made in a community with social sector interventions are not self-sustaining and require continued care and energy.
  • Ex- In certain panchayats, significant efforts have been made to prevent child marriages and caste-based discrimination. However, the halting of the work by Civil Society Organisations (Civil Society Organisations),  led to erosion of progress.
• Concerns of Scalability: The notion promises rapid transformations across diverse geographies and populations by applying the principles of effective work in one context to another, facilitating learning and adaptation.
  • In reality, in diverse social conditions, it is really difficult to apply one model or practice to another on account of differences in resources, manpower and infrastructural support, etc. 
• Inability to Create Systemic Change: Numerous participants, ranging from donors to Civil Society Organisations, assert that they strive to bring about system changes. 
  • However, such assertions lack a realistic assessment that such minuscule efforts alone are unlikely to bring about systemic change. They will at best yield incremental progress in one segment of the system.
  • As per a study, only one-third of NGO programs were found to reach the poor and most marginalized groups, and the level of targeting of landless, Dalits, poor women and poor Muslims was less than their proportion in the total population.
• Questions on the Efficiency and Integrity of Civil Society Organisations: There is a widespread belief that Civil Society Organisations are inefficient, ineffective, corrupt, or some combination thereof. 
  • In reality, Civil Society Organisations are no more corrupt or ineffective than any other enterprise in our society. 
  • Perpetuating this myth not only harms the innumerable people who are diligently dedicated to improving society, but it also undermines their efforts.

Legal Framework of Civil Society Organisations in India

• Societies Registration Act 1860

• • It registers associations, which are nonprofit-making entities, for literary, scientific, and charitable purposes.

• The Indian Trusts Act 1882 

• • It is a federal act for managing private trusts. However, different states later adopted their own public trust acts to register trusts for public, religious, or charitable purposes. 

• Section 8 of the Indian Companies Act 2013

• • This section allows companies to be registered as not-for-profit for a list of purposes, such as to promote arts, science, education, social welfare, and environmental protection, among others.

• FCRA Amendment Act 2020

  • The Foreign Contribution Regulation Act (FCRA) applies to all NPOs, such as societies, trusts, and Section 8 companies, which accept foreign contributions for their work. 
    • It limits the percentage of foreign contributions spent on administrative expenses to 20% instead of 50%. 
    • It also limits the transfer of funds from the recipient organization to other partners and associated organizations. 
    • It prohibits sub-granting of FCRA funds.
    • It mandates using the Aadhar card, a national biometric identity card, for all office bearers. 
    • Failure to adhere to these regulations can lead to the cancellation of an organization’s registration.
    • All foreign contributions are mandated to be received in a designated FCRA bank account with the State Bank of India in New Delhi.

Way Forward to the Civil Society Organisations

• Reduced Compliance Laws: Additional laws or compliance requirements should not be introduced for regulating Civil Society Organisations. The Union government can exercise its powers to investigate NPOs through the Comptroller Auditor General and CBI.
• New Appellate Body for FCRA-related Grievances: The home ministry may constitute an appellate body to address FCRA-related grievances.
• Capacity Building and Training: Capacity building of professionals working in Non-Government Organisation, community-based organizations, Voluntary Organisation and Civil Society Organisation is the need of the hour. 
  • Emerging tools and specific skills and tactics are necessary to build the capacity of volunteers and social workers. 
  • Training programs should empower the functionaries of organizations to perform internally better and towards the community they serve holistically.
• Charitable Funding: The Civil Society Organisations should look into ways to promote more collective giving, a type of philanthropic giving in which organizations combine their contributions to generate greater sums of money to address issues.
  • Collectivisation needs to be done geographically, where societies unite over common social challenges and unite their resources to address them.
• Synergy between Civil Society Organisations, Government and Private Sector:  The advantages of grassroots level work by the Civil Society Organisations, resources, and technologies with the private sector and traditional Government structures need to be harnessed to ensure the overall progress of society and achieve the goal of holistic development.