CHAPTER-2

CIVIL SOCIETY IN INDIA

Introductiou:
In the previous chapter, I spelt out the rationale of the study, its objective, research
questions and scope. I also discussed the concepts and a brief outline of the methods
to study those concepts. With chapterisation of this study, I gave details of what is
going to follow subsequently. This chapter begins with, first, tl1e contentious issues
involved in understanding the voluntary sector. Delving into these is cenhal to the
functioning of civil society in India. It is also very important to knm·v how civil
society historically emerged in Free India. Therefore, second, this chapter looks at tl1e
history and the status of voluntary action, from early post-independent India to
contemporary India. Third, it describes the types of civil society formations from
which emanate VDOs. Fourth, it shows VDOs as civil society organizations, their
characteristics, functions, types, evolving role, their size, scope, the internal shucture,
and the legal framework within which the VDOs operate. Fifth, deals with the
challenges facing the VDOs in India. Conclusion sums up this chapter.

2.1 UNDERSTANDING VOLUNTARY 'SECTOR': CONTENIIOUS ISSUES

Civil society in every region today is providing a broad and powerful means for
mobilizing citizen participation (Schearer, Oliveira and Tandon 1998:13) not to forget
the dominant tendencies that take place. This citizen participation has resulted from
the democratization taking place in most parts of the world. It has created fue
opportunity for citizens to become more engaged fuan ever before in the political,
social and cultural lives of fueir nations and of fue world as a whole. Salamon goes to
the extent of saying fuat 'a veritable associational revolution now seems to be
underway at the global level that may constitute as significant a social and political
development of the latter twentiefu century as fue rise of the nation-state was of the
nineteenth century' (Anheier and Salamon 1998:1) Despite the importance that is
increasingly attached to them, nonprofit organizations in the developing world,
including India, remain only dimly understood (Anlleier and Salamon 1998:1). This
gives rise to difficulties in understanding the voluntary sector, at three different
levels. In the first place, basic descriptive information about this set of organizations
is largely lacking. Though much praised, most basic descriptive information about

41
these organizations-their number, their size, their areas of activities, their geographic
distribution, their sources of revenue, and the legal and the policy framework within
which they work- is unavailable in any systematic way. At the second level, behind
this descriptive gap lies a significant conceptual one. The concept of such a sector has
hardly existed there. If it has, has done so in a peculiar way. This is in similar vein
with what Sen (1998) and Tandon (1998) say as mentioned earlier. The reason is that
many institutional forms often incompatible with one another coexist next to each
other. The concept of unified sector does not adequately reflect the diversity of the
organizational forms populating India's civil society' (Sen 1998:198-199) In part, this
conceptual gap reflects the long-standing assumption among several scholars that
the nonprofit sector is an essentially western, indeed quintessentially American
phenomenon. This might not be true. As Lars Jorgensen (1996:40), says that 'civil
society is not the prerogative of the European-type Industrialized societies that does
not really exist in the developing world'. Although most of those organizations meet
the formal criteria used to characterize the non-profit sector in Western
industrialized nations (Salamon and Anheier, 1997b), few people in India are
conscious of the existence of nonprofit sector in their own country (Sen, 1998). To use
the analogy of defining a social class, Sen says that 'India's nonprofit sector is a
sector "in itself" but not "for itself". That is to say, while the majority of the civic
organizations meet the formal criteria that objectively qualify it as a sector, the
people who are active or have stakes in those organizations do not subjectively
perceive themselves as belonging to a <;ommon sector. 'We must thus be aware of the
fact that India's nonprofit sector is, for the most part, an analytic construct rather
than a concept that is commonly used in that country'. (Sen 1998:199) The problem is
further highlighted by Tandon, who says that many 'VDOs may operate in relative
isolation with other civil society formations. Extended to another level, therefore
various actors of civil society ... do not have a sense of common identity as civil
society sector. This is an identity that can provide anchor and diversity to wherever
individuals are to act in larger public good. Thirdly, perhaps most importantly, the
concept of nonprofit sector has been obscured in developing countries including
India, by the peculiar way these set of institutions have been treated in the literature
on 'development'. Literature has focused most exclusively on 'non-governmental
organizations or NGOs'. Other terms widely used are 'grassroots organizations',
'voluntary organizations' and more recently, 'civil society organizations'. For one,

42
the term NGOs, is too narrow because as typically used, it includes only
organizations that are explicitly involved in the socio-economic development.
Another reason is that the term is frequently broad, because it embraces not only
domestic or indigenous organizations but also, a large number of intemational
agencies headquartered in the North but operating in the South, for example,
OXFAM, Save the Children etc. NGO thus becomes a term of aberration carrying
ideological construct than a neutral term that can be reliably be used for description
and analysis (Salamon and Anheier, 1998:1). According to Society for Participatory
Research in Asia (PRIA), the term NGO is a negative and non-explanatory label
because it includes private sector formations, development corporations, and welfare
boards and so on. The problem was aggravated because till now there was no clear
policy 1 on voluntary organizations. As a result, all organizations outside direct
administration channel and industries/business have been clubbed together, eroding
the spirit of voluntarism (VANI, 1999:24). Hence the term 'voluntary development
organization' (VDO) should be used, rather than NGO, to define the developmental
organizations (PRIA, 1991 and VANI, 1999). These are the reasons for using the term
'Voluntary Development Organisation' by me. Though this chapter is going to be
inclusive of civil society in India, the main emphasis is going to be on VDOs.

2.2 HISTORICAL BACKGROUND OF VOLUNTARY 'SECTOR':

India is an ancient and diverse civilization, shaped by various combinations of geo-
political, economic and social and demographic forces. These produced a variety of
institutions, social movements, traditions, system of beliefs and practices. What in
the 1990's is termed the nonprofit (or the voluntary) 'sector' in India is a product of
all these factors. To understand this sector fully it is pertinent to briefly review the
genesis and the role of voluntary sector in India. Taking from Sen (1998)2, the

Objectives of the Draft National Policy on Voluntary Organizations: 2006. The specific
objectives of the policy are listed below: first, To create an enabling environment for
VOs that stimulates their enterprise and effectiveness, and safeguards their
autonomy; second, To enable VOs to legitimately· mobilize necessary financial
resources from India and abroad; three, to identify systems by which the Government may
work together with VOs, on the basis of the principles of mutual trust and respect, and with
shared responsibility and authority; and four, to encourage VOs to adopt transparent and
accountable systems of governance and management.

The historical background of voluntary organizations in this study has been drawn
largely from Sen (1998) unless stated otherwise. See Sen, Siddhartha {1998) The Non-

43
development of voluntary organizations here is divided into five major historical
periods: pre-colonial (1500BC to late AD 1700) (Tandon 2000:4) mid to late colonial
(1810s to 1947)3; early post-independence (1947 to the late 1950s); the 1960s and
1970s; and the 1980s and 1990s.

Em·ltt post-independence period (1947-to the late 1950's):

The modern voluntary movement started with the constructive work of Mohandas
Karamchand Gandhi. He embodied the very notion of voluntarism in terms of
creation of community solidarity and not of political emancipation (Baxi, 1997: 56) 4 .
Two types of nonprofit organizations (NPOs) were predominant in this period.
These were: Gandhian NPOs and religion based NPOs including Christian and non-
Christian groups (Sen 1993). The primary activities of the Gandhian nonprofit
organizations like Harijan Sevak Sangh in this period were development and
empowerment, while those of the religion based organizations were welfare and
empowerment. The most important post-Gandhian program of the sarvodaya
movement was the Bhoodan (land-gift) movement initiated by Vinoba Bhave. This
movement addressed the most crucial problem of rural India, namely, providing the
ownership of and control over land to the tillers of land.

Increased differentiation and politicization (1960s and 1970s):

During this phase, ideas of conscientisation and people's participation began to
emerge. Sectoral specialization in health, agriculture, education, literacy etc., began

Profit Sector in India In Helmut K. An.;eier and Lester Salamon The Non-Profit Sector in
the Deveioping World: A Comparative Analysis.
From the 1870's, spread of nationalist consciousness and self-help emerged as the
primary focus of socio-political movements and influenced the future course of
voluntary action. And thus institutions such as Brahmo Samaj, Arya Samaj,
Ramakrishna Mission, Satyashodhak Samaj and Indian National Social Conference
began to emerge from these social movements (PRIA, 1991).
M.K.Gandhi embodied the very notion of voluntarism when he summoned the
Congress party to dissolve itself into a social service organization on the eve of Indian
Independence. At other levels, the same characteristics of voluntarism, in different
admixtures, pervade the work of great persons like Mother Teresa and Baba Amte. In
the same genre, but within religious framework, there is the work of Divine Life
Society, Ramakrishna Ashram, the traditional Christian missionary action among
others. The assorted Harijan Sevak Samajs, tribal 'uplift' associations, women's
welfare associations to mention a few, represent more or less, the same blood group
of voluntarism. The more contemporary variants of social service clubs, with high
participation of professionals and urban intelligentsia, furnish another variant of
voluntarism

44
to gain momentum in this period. Concurrent with these trends, older types of
nonprofit organizations continued to exist in the sector. There were various types of
nonprofit organizations that existed in this period.
These were:
• Welfare-oriented NPOs emerged in the 1960s and, to a certain extent, early 1970s.
Some of them were: SEWA-Self Employment Women's Association in Gujarat.
The emergence of a large number of welfare-oriented nonprofit organizations is
attributable due to a need for relief work because of the regular occurrence of
natural disasters like Bihar famine in 1966, in this period of Indian history. Also
western funding for relief work increased considerably during this period
(Franda, 1983; Terry, 1983 and Fernandes, 1986).
• NGOs formed by middle class professionals in the late 1960s and early 1970s
were capable of a high degree of specialization in development work, while
including empowerment. Sewa Mandir in Rajasthan, Gram Vikas in Orissa and
CINI-Child-In -Need Institute in West Bengal
• Nonprofit organizations known as nonparty political formations or action groups
began to emerge in the late 1960s and their numbers increased after the mid-
1970s. The primary emphasis of these organizations was empowerment, although
some of them mixed this with development. Examples of action groups are
Sangham Kshetriya Vikas Samiti in Uttar Pradesh tends to focus on traditional
artisan crafts; Asha for Education promotes basic education for poor and
underprivileged children in India.
• Community based organizations were formed in the early and mid-1970s that
undertook various developmental and empowerment-oriented projects. SEWA
works for poor women in the informal economy to enhance the income earning
opportunities and organize to enable its members to claim their existing rights in
economic, political and social sphere.

Predominance o{NGOs and the special interest organizations (1980s and 1990s):
The predominant type of nonprofit organization in this period was the NGO. The
radical types of acf!.on group began to disintegrate by the mid-1980s; although Seth
and Sethi (1991) claim that they continued to exist. Along with these trends, the older
types of nonprofit organization lived on. Finally the period saw the resurgence of
separatist, fundamentalist and ethnic movements (for example, Sikh, Kashmiri,

45
Jharkhand and the Naga movement) and organizations that were either offshoots or
that nourished them. According to Sen (1998), the emergence of NGOs in this period
is mainly attributable to three factors:
1. Governmc11t's stricter control of the sector and promotio11 of apolitical NPOs:
Govenu11ent's control of nonprofit organizations increased when the Janata Party
went out of power in 1980 and the Congress Party (Indira Gandhi) was re-elected.
The new Indira Gandhi government appointed a major commission of inquiry, the
Kudal Commission. This was in retaliation against the support given to Jayaprakash
Narayan by the nonprofit organizations (Fernandez, 1986 and Jain, 1986). The
commission was set up to inquire about the working of the Gandhi Peace
Foundation, an umbrella group of nonprofit organizations. Sen (1998) says the
commission made allegations about missing funds against 945 Gandhian nonprofit
organizations. The commission was dissolved in 1986-87, when a younger group of
NGO officials was successful in their campaign to end the inquiry (Sen 1998). Besides
the creation of Kudal Commission, the Indian State instituted other policies to
increase its control on the nonprofit sector (Fernandez 1986; Jain 1986; Kothari 1986;
Sen 1986 and Tandon 1986). These are the Foreign Contributions (Reguiation) Act
(FCRA) of 1976, the Financial Act of 1983, removal of tax exemptions from all income
generating activities of nonprofit organizations, proposed National and State
Councils for rural voluntary agencies in 1986, and a code of ethics for nonprofit
organizations joining those councils. The support for nonpolitical NPOs was not
withheld by the government. For example, by the late 1980's, NPOs could acquire
more financial resources directly from the Indian government and para-
governmental bodies such as CAP ART (Tandon 1988). Another example is the eighth
Five Year Plan which calls for increased participation of NPOs in improving the
delivery of social services and in ensuring people's participation for micro-level
planning (Government of India 1992a and b).
2. Concurrent with the increase of governmental control and the promotion of
apolitical organizations was the disintegration of the more radical types of action groups
in the mid-1980s5. Two types of action group that continued to exist One was active

5
According to Sen {1998), there are two main reasons behind this disintegration.
Firstly, these groups were led by charismatic young leaders. Once these leaders grew
older, established families and settled down, the very nature of the organizations
changed. Secondly, the failure of the experiment of the non-party political process of
social change began to emerge by this period. Some action group members joined

46
111 research and documentation with a less radical empowerment component and
second, was those that increased the development component in their project
orientation or became involved in campaigning. There was a growth in the voluntary
action at other levels also like support organizations specializing in b·aining,
advocacy, documentation, legal aid, networks, alliances etc.
3. The third factor that led to the rise of NGOs is attributable to the maturing of
NPOs as a viable sub-sector that offered alternative source of employment to young
professionals. The sector became professional as opposed to its traditional form
(PRIA 1991). In fact, all NGOs employed educated professionals and semi-skilled
people. (Sen 1998:222). The observation is further supported by Seth and Sethi (1991)
who state that more and more young people are looking toward NGOs for career
options.

2.2.1 Types of civil society

The historical background of civil society in India shows that civil society in India
comprises a very diverse and heterogeneous set of actors and agencies. The diverse
nature of the voluntary sector leads to defining the types of civil society formations
in India. In contemporary India, Tandon (1996:116-117) puts forward briefly different
types of civil society formation.
1. Communih;-based associations are a type of voluntary association, which is
formally accountable to its members (Edwards and Hulme, 1996). Community based
associations like village and caste associations in rural and tribal areas.
2. Mass organizations are organizations of peasants, women, students, landless
labourers, forest workers, construction workers etc. Trade unions also belong to this
category. JWP, AIWC, and ABVP.
3. Religious organizations like Hinduism, Islam, Christianity, Buddhism, Jainism,
Sikhism etc. are all religions that inspire the people to contribute to the well being of
the society. As a result, religious intervention for charity and social giving is
manifested in education, health care, feeding the poor etc. RSS or the National
Volunteers Corps is the core organization of Hindutva movement.

parties because they began to realize that joining a radical political party or getting
support from such parties was necessary to carry on radical empowerment to avoid
harassment from the local elite, the police or various political parties. Otherwise, the
radical parties were not willing to extend help to the action groups unless they joined
ranks. ·

47
4. Voluntary agencies and voluntanJ development organizations are a major visible
voice in the field of social development and poverty issues in India. Roles of these
organizations range from grassroots level mobilization, conscientisation, building
people's movements, monitoring state policy and advocacy research, documentation,
training and other forms of support. PRIA- Society for Participatory Research in
Asia, stands well mentioned here. It is an international center for learning and
promotion of participation and democratic governance. It focuses on the Panchayati
Raj programme for the grassroots at one level and on the other hand it monitors state
policy and advocates research (non-profit sector) in collaboration with Jolm Hopkins
Center, US.
5. Social movements (like social movements against building the Narmada dam,
the Tehri darn, mining in Rajasthan and prawn cultivation in coastal Andhra
Pradesh), struggle around the control over resources in national parks and
sanctuaries (like Rajaji in the North) also arose. Besides, the women's and Dalit
movement, issues like human rights, abolition of child labour, female infanticide,
freedom of information etc. have also been the rallying · themes of many
contemporary social movements in India. Movements are made up of diverse NGOs,
groups and individuals. Unlike VDOs, movements don't have any formal structure.
They are generally more fluid and lack boundaries. Social movement is a wide
concept often been made out of coalitions of several existing organizations (Ahrne,
1994).
6. Corporate philanthropy for social and economic well-being has been practiced
since Independence, although in a limited geographical and programmatic area.
With greater opportunities for economic enterprise being part of the policy, new
initiatives are emerging within the community of private business to apply a part of
their resources for supporting civil society initiatives in India. Example is of the
Confederation of the Indian Industry in alliance with Development Alternatives. The
strategic partnership between Development Alternatives and CII - CFSD aims to
promote the ·idea of organizational social responsibility.
7. As with the private market institutions, the nature of the consumer
movement has been rather weak in the past. It is only in the last few years that
effective organizing of consumer groups have begun in different parts of the country.
Voluntary Consumer Action Network is a consortium of 20 consumer and health
organizations. It is a foundation for health action.

48
S. Various cultural media are being used as a way of strengthening people's
learning capacities and organizations, and as a contribution to mobilization for a
social movement. Example is SAHMAT, a cultural formation addressing the issues of
secularism and democracy in Indian society today.
Y. Professional associations include lawyers, engineers, industrialists, doctors and
teachers etc. This group also includes associations and clubs like Rotary and Lions
etc, which serve the purpose of bringing the people together in socio-cultural
formations. Some professional organizations like PRADHAN are working with
carcass flayers and leather tanners and fishermen in Uttar Pradesh.
10. Economic associations are co-operatives as independent initiatives of small
producers and consumers. Though now being in a dependent and subservient
position to the state because of legislation, political control and funding, there is a
new possibility for autonomous co-operatives, which the recent legislation in Andhra
Pradesh brings. The success of the Anand pattern of milk cooperatives has led to
initiatives in fruits, vegetables and fisheries. The various rural producers'
cooperatives promoted by SEWA around Ahmedabad are well known examples of
these.
11. Major changes have been seen in both the print and electronic media in the
last decade. The most evident of these changes has been the number of channels on
television, the additional supplements of the newspapers and the increas~g presence
of new and glossy magazines. More obvious changes has been the apparent
proliferation of 'choices' that an individual has. The less obvious of the changes has
been the control of corporations on the media through ownership and indirectly
tlu-ough advertisements. (Chaudhuri :200)
In spite of different forms of civil society in contemporary India, they have
common features that are similar between them. What are common to all, however,
are three basic dimensions upon which variation occurs. It is the way in which these
elements develop and inter-relate that has led over time to divergence and
uniqueness of the constellations, which make up civil societies. These dimensions or
elements of civil society are:
• Funding: Every civil society organization requires funds to be set up and conduct
their activities in pursuit of their aim and interest.

49
• Organizational structure and placement of people within the organization: How
people organize themselves to do what they want to do? They express common
interests in pursuit of their aim?
• Vision: Every civil society has vision and mission.

2.3 VOLUNTARY DEVELOPMENT ORGANIZATIONS: VDOs

Till now I dealt with different types of civil society in general. VDOs are the main
type of civil society organization under study in this work. EVDO is envirorunent
VDO and HVDO is health VDO. This section signifies the relationship between Civil
Society, State and Market.

2.3.1 VDOs as civil society organizations: relationship with the state and market:
The govenunent's support for development-oriented organizations can be traced
back to the early post-independence period. Public-NGO cooperation of that era was
reflected through training programmes for government employees involved in
development projects, health care and social services run by the Gandhian .:\"POs
(Tandon, 1988). Goverrunent support for VDOs continued in the 1960s and the 1970s;
it even took the initiative to start developmental NGOs in this period (Franda. 1983
and Kothari, 1986). The third Five-Year Plan reiterated the importance of NPOs in
successful implementation of developmental plans (Prasad, 1987). In 1977, the
government provided an incentive to the corporate sector under Section 35 CCA of
the Income Tax Act to donate to approve NPOs involved in rural development
(AVARD,1991)6.
Three years of Janata rule were marked by a greater involvement of NPOs in
development projects (Chaturvedi, 1987 and Franda, 1983). During the Emergency
period Gune 1975-March 1977), thousands of Sarvodaya NPOs agitated against Mrs
Gandhi government and helped the Janata party to win the 1977 elections. Janata
Party reciprocated by promoting NPOs that had supported it in the past. The
government's effort to control the developmental NPOs started in 1980 after the re-
election of Mrs Gandhi's Congress Party. Such organizations were sidelined and the
government assumed the primary responsibility of implementing poverty alleviation

See Association of Voluntary Agencies-AVARD (1991) Role ofNGOs in Deuelopment: A

Study of the Situation in India, Final Country Report, New Delhi: AVARD. This
reference was cited in Sen (1998:259).

50
programs in rural areas to regain popularity (Chaturvedi, 1987). A major commission
of inquiry, the Kudal Commission was set up in retaliation against the support given
to Jayaprakash Narayan by the NPOs (Fernandez, 1986 and Jajn, 1986). Although the
commission was dissolved in 1986-87, when a younger group of NGO officials was
successful in their campaign to end it, its creation has been viewed as a policy that
led to an antagonistic relationship between State and NPOs (Sen, 1998:259). The
National and State Councils for rural NPOs proposed in 1986 and a code of ethics for
NPOs joining those councils viewed as the State's effort to increase its control over
developmental nonprofit organizations (Kothari, 1986; Sen, 1986 and Tandon, 1986).
These proposals were not adopted due to initiatives and lobbying undertaken by
certain nonprofit officials. The government's definition of the nonprofit
organizations in the seventh Five-Year Plan clearly indicates that it was seeking the
help of non-political nonprofit organizations. According to the document, 'Voluntary
agencies are essentially nonprofit and non-partisan organizations (Government of
India, 1985:66). Two of the eight criteria established in the document further
elaborated government's desire to collaborate with non-political nonprofit
organizations. One of the criteria stated that the office-bearers of the l'<'POs should
not be elected members of any political party. Another stated that nonprofit
organizations should be committed to secular and democratic concepts and methods
of functioning. The setting up of Krishnaswamy Committee7 to review government-
NCO relations in 1988. Although the recommendations of this committee were not
implemented, they included suggestions on simplifying the procedures for grants
from the government (AVARD, 1991 and VANI, November, 2000).

Clearly, the Congress Party that ruled India throughout the 1980s was
supportive of nonprofit organizations as long as they adhered to development.
Government's support for developmental voluntary organizations was also true for
the
Rao administration (1991-96). For examples, the eighth Five-Year Plan drafted under
him called for increased participation of nonprofit organizations in improving the

The Krishnaswamy Committee was set up under the chairmanship of the then
additional secretary, Department of Administrative Reforms and Public Grievances.
Other examples include first, the National Housing Policy (NHP) of the 1990s
encouraged nonprofit organizations to get actively involved in provision of housing
for the poor-a relatively uncommon field of NGO activity in India (Cited in Sen,

51
delivery of social services and in ensuring people's participation for micro-plmming
(Government of India, 1992a). The document also pointed out that a greater
emphasis would be put on the role of voluntary organizations in rural development.
'
It also stated that 'the role of voluntary agencies has been defined as providing a
basis for i1movation with new approaches towards integrated development, ensuring
feedback regarding impact of various programmes and securing the involvement of
local communities, particularly those below poverty line' (Govenunent of India,
1992b: 35). The document continues: 'voluntary organizations can act as a catalyst
and can organize beneficiaries, involve people in plarming and development and
provide the necessary support to make development a reality' (Govenunent of India,
1992b: 39). In this context, the National Planning Commission interacted at length
with a cross-section of nonprofit officials from all over India on the draft approach
paper to the eighth Five-Year Plan (AVARD, 1991). Another major issue facing the
voluntary sector (especially the VDOs) concerns problems associated with
indigenous sources of funding. The issue is important for at least three reasons, as
cited by Sen (1998). These are: First, the Indian government increa.c:;ed funding for
developmental voluntary organizations. This was seen as a move which is seen as a
move to have greater control over the sector and make NGOs adopt the model of
development prescribed by the State. Second, income-generating activities and
alternative sources of funds were curtailed by the State, making it difficult for NGOs
to survive and Third, the easy availability of governmental funding has been

1998). Second example is that of the two day convention on 7-8 March, 1994,
organized by the Planning Conm1ission to bring about a collaborative relationship
between the NGOs and the government. The meeting was attended by the Prime
Minsiter, the Vice-Chairman of the Planning Commission, senior government
ministers and secretaries and several NGO leaders. The dialogue resulted in an
agreement of principles, procedures and strategies to strengthen the collaboration
between the governmental and non-governmental sectors in the country, but no
agreement on substantive issues was reached at that time ((Sen, 1998: 264 and VANI,
Nov-2000: 2). Six years after this convention, a Joint Consultative Committee has been
constituted and the terms of reference of the Committee would be to examine and
make recommendations for grading of VOs, problems of delay in sanction of funds,
transparency and accountability in the functioning of voluntary organizations,
placing of vos under funding restrictions and relationship between panchayati raj
and vos and modalities of collaboration between them. The committee consists of
representatives of both the voluntary 'sector' and the government. Among other are:
Anna Hazare, social activist; representative of the ministries of rural development; social
justice and empowerment; health and family welfare; Human resources development; and
also, from the department of women and child development; sports and youth affairs; and the
planning commission. The Director-General of CAP ART would be the member-secretary of
the Joint Consultative Machinery.

52
cunningly used by politicians and retiring bureaucrats to set up nonprofit
organizations (Tandon, 1987). The traditional sources of funding associated with the
central government-CSWB, SSWB, the Handicrafts board and the Khadi and Village
Industries Corporation (KVIC) date back to the 1950s (Chowdhary, 1987). By the
mid-1980s, VDOs could acquire more financial resources directly from the Indian
government and para-governmental bodies like CAPART (Tandon, 1988). Though
CAPART has representatives of NGOs on its general body, executive committee and
standing committee, it still functions like the government deparbnent. As a result,
NGOs are not able to influence its policies and functions (Jain, 1997). Central
government funding became available for voluntary organizations working in the
fields of provision of drinking water, prevention of deforestation, social and
economic advancement of women and children, health care, adult education and
literacy, and rural housing.
Indigenous funding faces many bureaucratic obstacles as well. There are
delays in the second or subsequent installments of long-term funding from various
governmental agencies (PRIA, 1991). Such delays have led to the stoppage of
developmental projects as well as created liabilities of staff and infrastructure. It is
also noted that in this context, by and large government funding does not provide
overhead costs (for example, staffing, maintenance, building, staff development,
training, auditing and accounting costs) as they are project-based. Hence there is
little scope for long-term planning or institution building. Nonprofit officials have
often to please or bribe government officials to continue to get funding (Roy, 1990
and PRIA, 1991). They also have to make several visits to the ministry concerned to
get funds. Cases of harassment and stoppage of funds and subsequent inquiries by
central government intelligence officers have intensified since the mid-1980s
(Tandon, 1987). The problem was aggravated with the Financial Act of 1983, which
limited the funds that nonprofit organizations could receive from industries by
removing income-tax exemptions that were previously given for donations to rural
development projects (Kothari, 1986). The removal of most tax exemptions from
income-generating activities of the VDOs made them dependent on external funding.
Although NGOs can get low interest loans for empowerment/income generating

53
poverty alleviation programmes for rural development from nationalized banks,
there are several problems associated with this type of funding 9 (Sen, 1998).
Relations with government are not always cordial. It introduced legislation
designed to restrict the formation and operation of nonprofit organizations and to
conb·ol and monitor the activities of NGOs (Robinson, Farrington and Satish, 1993: 95
and Sen, 1998: 266). All voluntary agencies with seven or more members were
compelled by law to register under the Societies Registration Act 1860. This
registration is essential for VDOs wishing to apply for grants from government or
receive foreign funding (Fernandez, 1986). Established in response to allegations that
foreign funds were financing subversive activities, it compels all organizations
wishing to receive foreign funds to register themselves with the Home Ministry, to
submit audited accounts on a half-yearly basis and to provide details of each
individual contribution. The provisions of FCRA were further tightened in 1984 to.
As a result of this, number of NGOs had their registrations suspended. The act
empowers the State to ban any organization from receiving foreign contribution,
should the State consider the organization to be violating its neutrality status (Sen,
1998:266). While the amendments to the Act increased delays and reporting
requirements faced by NGOs and made it easier for government to conduct
investigations or impose sanctions, they have done little to stem the flow of illicit
foreign funds (Robinson, Farrington and Satish, 1993: 95). The missing component in
the act is to monitor anti-national activities, whether it is undertaken with foreign
money or Indian money (V ANI, 2000:1-2) NCO leaders have argued for the
liberalization of the FCRA on the grounds that this has been taking place in all
sectors of the economy, including the relaxation of the Foreign Exchange Regulation

According to Sen {1998), the problems associated with this type of funding are: First,
banks prefer subsidies linked to such credit schemes, which have to be raised by
NGOs from other sources. Second, banks may insist on collateral for such credits
despite the fact that this is not required. Third, banks are under pressure to fulfill
their quotas under the government's own anti-poverty programs and are reluctant to
finance NGO programs. Fourth, the recovery rate of the government's program is
poor, which puts a strain on limited resources that are available for such schemes.
Fifth, political parties in power have waived loans as a populist measure and to catch
votes, further straining the limited resources. This was especially true for the Janata
Dal administration {1989-90), which waived such credits to fulfill its electoral promise
(AVARD, 1991).
10
If the organization is registered with the Home Ministry, no prior permission is
needed for receiving foreign funds. Alternatively, an organization may not register
with the Home Ministry and receive foreign funds after obtaining prior permission
from the government for each remittance (AVARD 1991).

54
Act (FERA) of 1973. They have also suggested moving the FCRA section from the
Home to the Finance Ministry to reduce bureaucratic hurdles (Sen 1998:266). While
the voluntary sector feels that FCRA is inconsistent with the standards of the United
Nations Declaration on Human Rights Defenders, its implementation also violates
principles of natural justice and therefore, violates Article 14 of the Constitution. The
voluntary sector firmly demands the repeal of FCRA and its replacement by a Civil
Act as against the present enactment under the 'Defence of India Rules'. The
voluntary sector feels that just by adding the word 'assistance' in the Preamble of the
Foreign Exchange Management Act of 1999, the present problems pertaining to the
FCRA can be solved (VANI 2000:2)11. As seen, the Foreign Contributions Regulation
Act 1976 has been a major instrument in regulating the receipt of funds from abroad
not only by voluntary organizations but also by commercial companies. This act
limited the funding sources of nonprofit organizations by stipulating strict
restrictions on the receipt of foreign funds (Fernandez, 1986). Other than this Act,
the Financial Act of 1983 restricted the formation and operation of NPOs, including
VDOs, by limiting the funds that they may receive from private industries. This act
removed income tax deductions that were previously given to industries for
donations to rural development projects, undertaken by NPOs (Kothari, 1986).
Around the same time, all tax exemptions from income-generating activities of NPOs
were also removed, thereby making it difficult for them to be financially self-
sufficient (Sen, 1998:267).Another major issue facing the nonprofit sector concerns
that of foreign funding and the State's role in attempting to make such funding
accountable. Most of the funding under FCRA comes from NGOs, Church groups
and foundations in the developed nations. The major donors are from Europe, the

II
A nation wide campaign for creating conducive legal environment for voluntary
sector was launched in March 1999. It is called Campaign for Transparency in Foreign
Funding, by the voluntary sector. As a part of this campaign, a three member
National Campaign Committee has now expanded to 44 members, comprising of 44
leading voluntary activists, belonging to donor groups, and academics. The EVDO
and the HVDO are also part of this committee. Till September, 2000, 560 voluntary
organizations had joined the campaign and contributed Rs1, 60,927 for the campaign
for the repeal of FCRA. 381 voluntary organizations have joined the letter campaign
by sending letters to the President, Prime Minister, Home Minister, Chief Justice of
India and the Chairperson of the Human Rights Commission. Efforts continue for
influencing the stakeholders, that is, international donors, government and the
voluntary sector. Efforts are also on and initiatives are being taken for building
alliances with other sectors of the society such as the media, academicians, trade
union and the corporate sector. For more information on the efforts towards
repealing the FCRA, see VANI newsletter (2000), September issue.

55
USA and Canada, although Australia, New Zealand and Japan are emerging as new
donors (PRIA, 1991). CAPART handles a small portion of foreign funding for
development. A very small portion of funding from multi-lateral institutions such as
the WHO, UNESCO, FAO, ILO, World Bank etc., is also available. Such funding has
to be approved by the government. In World Bank assisted projects, nonprofit
organizations are involved under supervised conditions (PRIA, 1991). The issue is of
importance because of three reasons. First, the gove:rnment has not been successful in
its efforts to control foreign funding of separatist and fundamentalist nonprofit
organizations, which engage in activities threatening national unity. Sccoud, the
government alone may not be able to sustain NGOs through indigenous funding (see
AVARD, 1991, for example,). This in turn may rest:rict the growth of this sub-sector.
Third, many innovative developmental projects '"'ere possible because of foreign
funding for NGOs (AVARD, 1991 and PRIA, 1991)
Political parties of all orientations have been skeptical about foreign nonprofit
organizations as well as foreign funding. The government has always attempted to
maintain a strict accountability on foreign funds fM voluntary organizations, which
are regulated by the Ministry of Home Affairs tll.rough the FCRA (Sen, 1998), as
mentioned earlier. The encouragement given by multilateral organizations since the
1980s, such as the World Bank, UNDP and various agencies of the UN other
developmental assistance agencies from the North has been seen as promoting the
wider cause of global capitalism by many scholars and NCO officials. Rajni Kothari,
a political scientist who is also associated with. a Delhi-based VOO, criticizes
acceptance of excessive of foreign funding by VDOs. He says that such (multilateral)
agencies are key agents of transnational capital (Kothari, 1986). In the name of VDOs,
capitalist forces tend to control the vast natural resources and the trade of the Third
World countries, in collusion with the state of these countries (Kothari, 1990).
Caution about foreign funding is in some measu:re a function of Indian leaders'
conviction that the nation must nourish its own developmental capabilities (Franda,
1983). According to Singh (1992) Indian NGOs sho0uld learn their lesson from the
Structural Adjustment Programme (SAP) promote<l by the World Bank and USAID
in other parts of the developing world. Some support the selective acceptance of
foreign funds. Social activist like Dhanagare (1988) argues that if government and
private corporate sector can openly accept for~ign money, no harm exists if
voluntary sector also does so. Ramamurthy (1999) j11stifies the dependence of VDOs

56
upon external grants only for welfare activities such as public health and education.
The socio-economic projects, according to him, must be approached with an attitude
to ensure economic sustainability and consequently a long-term social-development.
NGOs themselves differ in terms of their views on foreign funds. There is some
refusing to accept foreign funds for ideological reasons, while others survive on it.
However, several common problems associated with acceptance of foreign funds,
according to Sen (1998) are:
Firstly, an NGO may develop dependency on such funds; secondly,
representatives of foreign donors may dictate the recipient's projects and orientation
(PRIA, 1991); third, the availability of foreign funds has led to the splitting of NGOs
and the formation of new NGOs (PRIA, 1991), because officials have seen
opportunities to open up newer NGOs given the availability of funds; fourtlz, asset-
building and misuse of foreign funds by NGOs is common; and fifth, most foreign
funding is project-based, leaving little room for long-term planning or institutional
capacity-building (AVARD, 1991 and PRIA, 1991). In 1996-97, Rs 2,571.69 crores was
the total foreign aid received by voluntary organizations in India. Where as
voluntary organizations in Tamil Nadu were the highest receiver of foreign aid
amounting for Rs 404.98 crores and about 15.75 percent of the total aid, Dadra and
Nagar Haveli received Rs 0.72 crores amounting to a mere 0.03 percent of the total
foreign aid. In 1996-97, voluntary organizations in Delhi received Rs 346.35 crores as
foreign aid and thereby, accounted for 13.47 percentage of the total foreign fund
received by the VDOs (Source: Account Aid, the Ministry of Law and Company
Affairs, cited in VANI, September, 2000:19-20). Attempts to promote democratic
consolidation had been largely focused on making the electoral process more
transparent and accountable ((Tandon, 1996).
In recent years, two other types of initiatives have gained momentum. First,
some VDOs in collaboration with the media and academia have begun to analyse
and publicly disseminate the budgets, policies and programmes of the government
to make it more transparent and accountable. Disha's, a VDO's work in Gujarat state
is one such example. Second, the 73rd and the 74th amendment have made the
provision of Panchayati Raj and Muncipality in rural and urban areas respectively.
However, in 1993 response of many VOOs were ambivalent. In order to bring about
a collaborative relationship between VOs and government, in 1994, the Planning
Commission initiated a dialogue between the government and voluntary

57
organisations. A two day convention of about 100 voluntary organisations from
different parts of the country was held at Vigyan Bhawan, New Delhi on 7th and 8th
March, 1994. The convention was inaugurated by the Prime Minister ,..,ith the
Deputy Chairman, Planning Commission in the chair. The involvement of Senior
Ministers from the Government of India was mandated to examine issues relevant to
a collaborative relationship between the government and the VOs. In the two day
deliberations, the Commission formulated and adopted an "Action Plan to Bring
about a Collaborative Relationship". The Government of India has accepted this
Action Plan Document.
I now turn to an overview of the International non-governmental
development aid agencies in India. There are four main sources of foreign funding to
India: bilateral assistance from rich northern governments to India's central
government; multilateral assistance from UN agencies, the World Bank, the Asian
Development Bank, the European Union, the IMF etc; international solidarity groups,
international trade unions and other international organisations funding their Indian
counter-parts; and international non-governmental development aid agencies and
private trusts funding mostly the NGO sector in India. In the first rn·o cases
assistance is given primarily for government-sponsored development programmes
in the form of grants and loans.
The official development assistance (ODA) in 1998 was $1,594.6 millions
which constituted only 0.4% of India's total GNP (UNDP 2000) making India less
dependent on foreign economic assistance than are many African and Latin
American countries. The Organisation for Economic Co-operation Development
(OECD) countries is by far the world's largest group of donors for bi-lateral aid.
Multi-lateral aid is channelled through agencies like UN organisations (UNICEF,
UNESCO, FAO), the IMF, the World Bank and regional development Banks (the
Asian Development Bank) and other institutions such as the European Commission.
Subsequent to the opening of India's economy to multi national corporations
(MNCs) as a part of India's Structural Adjustment Programme (SAP) there has been
an increased flow of funds into the country. However, the impact of foreign aid on
India's development policies is highly controversial. While most aid is" tied" and in
many instances given according to the political and commercial interests of donor
countries, in some cases foreign aid has served to challenge some of the Indian
government's policies on poverty alleviation. It is estimated that less than 25% of

58
official aid is spent on poverty alleviation, and most official aid is chmmelled through
the central government which sometimes uses it for political ends that are not strictly
development-related.
This overview analyses the relationship between the VDOs, state and the
market (aid agencies or the donors). International NGOs vary greatly in size,
approach and focus. Based mainly in the North, most undertake fundraising
activities within their own countries and advocacy work at home and internationally.
For the majority, India continues to be a priority area for their activities, where they
use a variety of working strategies. Some manage their work in India mainly from
outside headquarters, while others have non-operational local field offices through
which all programmes are monitored like Agha Khan Foundation and Ford
Foundation. Some international agencies have operational local offices that also run
programmes independently of the larger organisation and are directly involved in
advocacy work. International agencies may specialise in one area, such as on
children or on agriculture. While some organisations fund projects directly, others
work through Indian funding organisations, or instead of financial support provide
teclu1ical and institutional expertise. International trust funds granting funds from
parent companies profits are also regular supporters of development initiatives.
Official data about the number of international NGOs working in India or L~e total
funds donated to NGOs is scarce. As:Jper recent research carried out by CAF India
(Charity Aid Foundation) and VANI (Voluntary Action Network India) there are an
estimated 18,000 NGOs in India registered under Foreign Contributions (Regulation)
act of 1976 in 1999 to receive foreign money without prior permission. Similarly
another 4,000 NGOs were granted temporary permission during the period 1990-98
to receive foreign money. By the end of 1997, the volume of foreign contribution to
NCO sector had reached nearly $568 million (Rs26, 000 million), a growth i:ate of
643% over the last decade. Sri Satya Sai Centran Trust and Maharishi Ved Vigyan
Viswa Vidya Peetham alone received 25% of the contributions. The research shows
that only 20% of foreign aid is received by "development NGOs". The European
countries were the single largest world donor group contributing two thirds of the
total foreign contribution in 1996-97 and another one forth share came from North
America (USA and Canada). The high proposition (i.e. about 93%) came from the
Organisation for Economic Co-operation Development (OECD) donor group.
Germany, which dominated the contribution for long, has been surpassed by the

59
USA, which contributed more than one fifth of the total contribution during 1996-97.
Three leading countries, namely, the USA, GERMANY and the UK, contributed more
than half of the foreign contribution.
For the majority of international NGO donors, India continues to be a priority
for long-term development programmes. This is due to ample evidence that funds
are being used wisely and productively. International developments NGOs are
playing an increasingly prominent role in development thinking in India. One \vay
in which Christian Aid pursues this goal is by researching, monitoring and
commenting on levels and quality of aid, both that of UK and Irish govenunents, and
multilaterals and bilaterals in generalt2. Over the years they have made significant
contributions to poverty alleviation efforts, particularly in the areas of advocacy,
gender sensitisation, capacity building, and new models of development, networking
and north-south exchange programmes. They have a strong influence among the
NGOs in India in prioritising their work and target groups. Because of their
proximity to Northern Governments and other international bodies they are in a
better position in challenging and influencing their policies. In short, they are one of
the important players in the field of development in India, in shaping the policies,
strategies and programmes of NGOs in India. However, they have also come under
criticism for promoting donor driven policies, pushing western ideas on gender, and
causing a mushrooming in the number and size of NGOs in certain regions.

2.3.2: Definition and Charact~istics

Voluntary action in India has gained momentum with the advancement of society.
The growth of voluntary organisations over the past four decades has given them an
increasingly important role. This has led them to form a distinctive sector within civil
society. They have emerged as a viable institutional framework and a well defined
'third sector' -next to government sectors and private enterprises. Their role is to
serve as a catalyst for development and change. VDOs possess certain features and
characteristics, which enable them to be distinguished from other organizations in
civil society. Given the Indian situation it is rather difficult to bring the entire gamut
of third sector initiatives under one common definition and characterization, every

12
See for example Van Diesen 1998 and 1999 and Lockwood and Wood 1999.

60
known terminology seems to leave out some initiatives out of their purview. What
makes Indian third sector vibrant and at the same time complex, is the emergence of
innumerable ad-hoc initiatives. A typical example could be a group formed to raise
money and celebrate Public Ganesha worshiping or Dassera celebrations or a
community initiative to clean up the village tank. These initiatives do not last for
more than a few days, but then are integral to Indian voluntary sector. Therefore,
definitional issues continue to be an important issue among third sector researchers
and practitioners in India. And so it be.
The term VO, has been understood, defined and used in a variety of ways 13. The
Seventh Plan Document (1985-90) of Planning Commission of India while
recognising the role of VOs in rural development programmes listed out eight
criterion for identification of the voluntary organizations. These are as follows:
1. The organisation should have a legal status.
2. It should be based in a rural area and be working there for a minimum of
three years.
3. It should have broad based objectives serving the social and economic needs
of the community as a whole, mainly the weaker sections. It must not work for
profits but on a no profit no loss basis.
4. The activities of the organisation should be open to all the citizens of India
irrespective of religion, caste, creed, sex or race.
5. It should have the necessary flexibility, professional competence and
organisational skills to implement programmes.
6. The office bearers of the organisation should not be elected members of any
political party.
7. It must be committed to secular and democratic concepts and methods of
functioning.
8. It should adopt constitutional and non-violent means for rural development
purposes.

13
Lord Beveridge (1979) defined a voluntary organisation as "an organisation in which
whether its workers are paid or unpaid, is initiated and governed by its own members
without external control". Modeline Roff added that VOs should depend in part at
least, upon funding support from voluntary sources. Gangrade (1987:220-221) gives
features of voluntary organization in India.

61
Based on this criterion, voluntary organisations have distinct characteristics. These
make them different from other organisation in the society. Ideally, the chief
characteristics of VOs are:-
• They are initiated by individuals or group of individuals for undertaking welfare
and developmental activities for the disadvantaged groups of the society.
• . They are self-governing organisations and decide their own constitution and the
system of governance without any external control.
• They are non-statutory autonomous organisations and the membership is purely
voluntary in nature.
• The work of VOs and their activities are focused on issues and people beyond
their own staff and membership.
• They plan and implement their own policies and programmes with their own
voluntary or paid workers.
• They have considerable autonomy and flexibility in the planning and
management of their programmes.
• They can be both non-political as well as politically or ideologically oriented.
• They are neither formed nor run for profit making.
• Most of the VOs have a non-formal style of functioning.
• They have a managing committee that is elected/ nominated by the members.
• They have motivated leadership and a sense of commitment and dedication.
• They mobilise some of their resources from the community and voluntary
sources.
• They have a legal status through registration under an appropriate Act.

VOs play a vital role in nation-building and national development. The strengths of
VOs that put them in positions with more advantage over the governmental actions
in effective implementation of programmes are:-
• The philosophy of VOs is always 'people-centred' and 'pro-poor'. They serve the
poor and disadvantaged sections of the society with rare dedication and moral
commitment.
• VOs use the participatory method to promote people's participation in various
developmental programmes which is the key to successful or sustainable
development.

62
• VOs are close to the community and they are well aware of their local needs,
demands, priorities and problems.
• The inter-personal relationship and intimate contact with the people help them
mobilising more collective efforts in bringing social change and development.
• VOs are fewer rules bound and are non-bureaucratic, nonformal, easily accessible
and flexible in their structure and operation.
• VOs can reach effectively the most isolated locations where government
programmes are limited, non existent or ineffective.
• VOs are equiped with h·ained, experienced and dedicated workers.
• VOs play a 'watch dog' or surveillance role and check unbalanced growth and
development.
• VOs believe in development with social justice, equity and equality.
• VOs encompass institutional, behavioral and attitudinal changes and easily raise
awakening and awareness among the masses.
• VOs are best suited for the tasks of information dissemination, knmvledge,
evaluation and monitoring activities.

2.3.3 Roles and Functions:

VDOs achieve their aims through different kinds of roles and functions. These roles
and functions of VDOs are described in terms of
• Who their work is directed at? Or in other words, who are the beneficiary or
target group of the VDO. These could include groups such as children,
adolescents, women, refugees, elderly people, agricultural workers etc.;
• What issues are addressed by VDOs? For example, whether it is environment,
health, income-generation, micro-finance etc.;
• Where do the VDOs work? Or in other words, the geographical areas of
operation of a VDO such as rural and/ or urban; and
• vVhat are the means/ activities for addressing an issue to the disadvantaged
people in specific area of its operation? These activities could be awareness
generation, reform, information documentation and research, training,
campaigning advocacy, project implementation and networking etc.
These functions. are not mutually exclusive and thus do not create types of VDOs.
Roles and Functions of VDOs are connected. Many VDOs describe themselves as
multi-functional. For example, VHAI, and Deepalaya VDO carry out their

63
multifunctional activities. VHAI is an association of health organizations in India.
Deepalaya is an education-based NGO.
In the past, voluntary organizations adopted a religion-oriented mass
approach in an informal atmosphere, stressing on programmes of education,
medicine and social reforms in their action plans. The services provided by its
members were honorary and free of cost to the beneficiaries. At present, the agencies
adopt nationalism-oriented group approach in a formal atmosphere. The objective is
the socio-economic development of the specified target group through paid, full-time
and formally h·ained workers. They raise funds from masses, take
government/ international aid and collect membership fees for services rendered
(Kishore, 1986 ). The Commonwealth Foundation (1997:22) describes two principal
activities of NGOs: care and welfare activities; and activities oriented towards
promoting change and development. In addition to these, Korten says that functions
of VDOs changed over the years such as relief (and welfare), community
development, sustainable system and people's movement (Korten 1992:91). Jha and
Mishra (2000) put forward major developmental roles ascribed to VDOs. These roles
of VDOs are to act as:
• Planner and implementer of development programmes;
• Mobiliser of local resources and initiative;
• Catalyst, enabler and innovator;
• Builder of self-reliant sustainable society;
• Mediator of people and government;
• Supporter and partner of government programme in activating delivery system
and implementing rural development programmes, etc.;
• Agent of demystifying technology and disseminating information;
• Factor of transformation, conscientisation and improvement of the poor; and
• Facilitator of development education, training and professionalisation etc.

Majority of voluntary agencies provide multiple services and perform various roles
simultaneously. These roles and activities of voluntary action are not limited to any
particular sector of development. Farrington (1993: 302) finds that an NGO has to
observe different roles such as collaborative, incorporative, informative, interactive
and conflictive. Major contribution of an NGO to development is to organize,
mobilize and utilize resources within and outside the community for its

64
development. The basic role is as an organizer. The VDOs in India have been trying
to sensitise, organize and mobilize people at village, local community level and
various other levels, and also interested groups particularly fighting the poor to
enable them to pursue self-development, fight for their rights and apply pressure on
the government where needed. The impact of such activities is clearly discernible in
certain specific areas. The people's movement such as Chipko Andolan, Narmada
Bachao Andolan etc. on the one hand and Center for Science and Environment's
scientifically acclaimed study 'Slow Murder' -The Deadly Story of Vehicular Pollution
in India' are some of the examples of VDO efforts in respect of environmental
security. Similarly, All India Women's Conference, Self-Employed Women's
Association, Jagori have been quite active in raising women's issues and working for
the upliftment of women. National networks, like VANI, with the support of 560
voluntary organizations across India campaigned for the simplification of FCRA, and
other rules and regulation pertaining to the voluntary oganizations (V ANI-
September, 2000). Support organizations like PRIA are involved in influencing
policies from the vantage point of enabling participation and empowerment of
marginalized.
Another area where voluntary development organizations have made
successful attempts in reaching the poorest is through iimovative micro-financial
services like savings and credit through self-help groups. Self-Help groups have been
encouraged to practice thrifts and small savings collected are lent to individual
members to meet consumption needs. Such group formation does not only help
impart credit management skills to individuals but also lead to better end use of
credit and prompt repayment due to group pressure. The women self-help groups
have helped in changing gender relations by empowering their members. The Self-
Help movement, supported by the voluntary sector, has spread across India.
However experiences have shown that what works for poor women is not credit
alone, but a credit plus strategy. Self Employed Women's Association-SEWA in·
Gujarat, MYRADA in Kamataka, Cooperative Development Foundation-COP and
BASIX in Andhra Pradesh, SPARC-Mahila Milan in Mumbai are some of the
examples in India that have proved that to make credit productive, poor women and
men need support in terms of skills, marketing, health care, housing finance etc.
During the Eighth Five Year Plan (1992-97), a high level YO-Government Meeting
organised by the Planning Commission on 7-8 March, 1994, identified a number of

65
areas for VOs participation. These included: Watershed management, Sanitation and
drinking water, integrated rural development, family welfare, education, health,
development of women and children, social welfare, labour, science and technology,
non-conventional energy sources, urban development dealing with the problems of
urban slum dwellers, street children and environment and forests. In the field of
environment, many VOs, apart from creating environmental awareness, are engaged
in various action oriented research. They have played a 'watch dog' role in
protecting the environment from further degradation. Many VOs have taken up
ecological issues in their agenda for action towards a sustainable development. They
have many a times mobilised the local populace against the destruction of the
environment and on the question of their rights for compensation and rehabilitation,
thereby, making them conscious towards the contemporary environmental issues.

2.3.4 Types:
Definitions of VDOs distinguish them from other forms of organization. Such
descriptions are steps along the way to a full understanding of types of VDOs. Here I
describe the types of VDOs in India. We know that VDOs differ with respect to their
ideological shade, size, levels of operation and linkages. This reflects in their nature
and modes of intervention. The types of VOs and NGOs in India are diversified,
exploratory and evolving. No single parameter can provide the basis for
understanding_ the wide range of VOs that exist in India today. They are
distinguished by a considerable spectrum of bases concerning their form, size, origin,
vision, mission, or religious affinities or sources of inspiration, economic strength/
funding, target groups, forms of control and governance, functional diversity,
activity, legal status, level of operation etc. Based on empirical observations and
variations, Dhanagare (1988) classified VDOs on the basis of their nature of
intervention as (a) relief and charity; (b) development work; (c) mobilization and
organization; (d) politics and (e) political education. Similarly based on their mode of
intervention, VDOs are categorized as (a) charity oriented; (b) product oriented; (c)
delivery type and (d) process oriented. However, a pure type of VDO falling
exclusively under one of the above categories is rare. VDOs also work at different
levels and on different scales. Some are international in that their work extends
beyond one's country. At the international or national level, they· usually act as
donors or advocacy agents. Others at the regional level provide training and other

66
inputs for the capacity building of the grassroots organizations and the local
initiatives. At the grassroots level, there are local VDOs which work within defined
geographical areas. A study by PRIA (1991) classifies VDOs, on the basis of their
size, into four categories. These are: the small VDOs, medium VDOs, big VDOs and
large VDOs. Small VDOs are numerically predominant in India. They work in few
villages within a development block or in a few selected urban slums in one part of
the city. They have many people who work on part-time basis, volunteers and few
full time staff. The medium sized VDOs tend to cover one or more development
blocks in rural areas or a couple of slums in the city. They may have ten full time
staff. Big VDOs would be employing between 25 to 50 full time staff at different
levels, covering several districts or cities. Large sized VDO has a staff size of 100 or
more. They are fewer in number in India, today as the study shows. The case VDOs
taken up for this research inquiry belong to the category of large VDOs.
"A diversity of purpose and origin exists within voluntary development
organisations and NGO's. They vary in purpose, style of functioning, size and scale,
they also vary in the very manner of their structuring, funding and outputs. Some of
these NGO's are representative organisations of their members, some other work
directly with local communities to promote local development. It is this enormous
diversity which requires an innovative approach to facilitate communication among
them, should it be necessary to work together. This is the rationale for the
widespread use of networks for communication across various types of actors of civil
society. When individuals, groups or organisations want to communicate with each
other, without surrendering their autonomy, without becoming full time employee
or member or subordinate to a larger entity in order to pursue some common
development agenda, then these linkages assist in communicating, sharing
information, finding out about each other. This is the rationale for creation and
sustenance of a network."
... Dr. Rajesh Tandon

Actors in civil society are diverse, occasionally working together, mostly

acting alone and diverse in their purposes, composition, style of functioning and
performance. They vary in size, from individual initiatives to informal groups to
those organized as VDOs or NGOs. They encompass diverse constituencies. Some
are representative organizations of their members; some others work with local

67
communities. It is this enormous diversity, says Tandon (1998 'a': 5) 14 within the
actors of civil society that prompt the requirement of alternative ways of
communication and working together. Network is one such alternative mechanism.
When different voluntary organizations, sharing a common vision and ideology,
want to come together on specific common problems, they need not create an
'organization'. They can maintain their autonomous character and yet come together
on issues of common interests. Such short term as well as long term linkages and
coalitions can take the form of network (Tandon, 1998 'b': 2).
More the diversity, more are the expectations of the members of a network; higher is
the degree of formalization. Coordination is maximum when the degree of
Commonness is highest. In search of commonness and pursuit of more purposes,
networks become more and more formalised and reach a stage when they can be
recognised as federation. It is difficult to define a standard for the degrees of the
above dimensions of a network. Every network has to decide the levels of
Coordination, Commonness and Formalization suitable to its objectives and the
environment in which it operates. Formation of a network should be appropriate to
the situations and needs. The need is to focus on the Capacity to deal/cope with
diversity which is an essential pre-requisite for a netvwrk without converting
diversity into uniformity; the capacity to ensure coordinated action among
autonomous members. Building, sustaining, maintaining a relation is the
fundamental basis of establishing a network. It was also observed that linking on
both, at the level of thoughts and emotions, gives stability for a network, but there is
lack of emotions in the linkages. Coordination is difficult for networks since each VO
has compartmentalised thinking. Networks have to evolve strategies as per the
respective situation to cope up with this difficulty.

Difference between Network and Coalition, Alliance, Federation:

A Network has institutional framework is structured with set parameters, have well
defined and specific tasks and responsibilities and have defined boundaries. There are
both internal and external functions of a network. Example: VHAI, V ANI, PRIA.

14
For differentiating between two papers by Dr Rajesh Tandon (as they are part of the
same source), I have marked the paper on 'Networks as Mechanisms of
Communication and Influence as 'a' and the other paper 'Networks and Their
Functions' is marked as 'b'. This has been done to avoid confusion.

68
Coaliti011: In a Coalition a set of people with different ideologies come together to
address a common issue. It is essentially issue based, time bound and campaign driven.
Coalition is a union, fusion: a temporary combination of parties that retain distinctive
principles and identities. Coalition are less formalised has flexibility in operation and
do not have any defined or limited boundaries. For example, coalition of various
organisations and individuals fighting for the cause of Corruption.
Alliance: Alliance is broad based and the degree of formalisation is less. It is temporary
in nature. In an alliance identity of the parties coming together is not clear. Example:
Alliance for Narmada Bachao Andolan.
Federation: A federation is highly formal in nature and is very highly coordinated. It has
very well defined structure and internal management mechanism is highly formalised.
Convergence of common interest is there in a federation but the individual entities
get merged into collective entities. Membership is very formal and based on certain
principles, guidelines and norms. Generally taking up of membership of hvo
federations at the same time is regarded as violation of the laws.
Consortium: In a consortium structure is loose and internal management is medium.
Resources are pooled and distributed according to the objective set forth. As soon the
dish·ibution of the resources is finished the consortium disintegrates. Complete
autonomy exists in a consortium. E.g. consortium of funding agencies formed for
poverty eradication, Resources are pooled in and after the completion of the work
they disintegrate. Credibility Alliance is a non-profit consortium that aims to be a
self-regulatory body for the non-profit sector in India. It has come together with the
objective of enhancing good govemance in the voluntanJ sector and furthering its credibilihJ
in the eyes of the public. It is a unique initiative that has evolved from constituents of
the voluntary sector itself.
It is significant to mention here the difference between Network and Networking:

• Network is an identity while networking is a process.

• Networking is much more than simple identity and is continuous ongoing process

• While network presupposes coming together networking presupposes relating to

(somebody always).
• Networking becomes important to make network effective and have impact.

69
 The prime reason for selecting EVDO for this study is that in being an
association/network, it has the potential to operate outside the dominant
institutional framework. In doing so, it becomes a vehicle for identifying, articulating
and discussing issues of major concerns. Then a network becomes a mechanism for
sharing information, experiences and ideas across like-minded individuals, groups
and organizations. These individuals might be spread geographically and working
on diverse priorities but may be bound with one broad issue, that is, health. To
differentiate this process of exchange of information and ideas that takes place in a
network (as in HVDO) and that takes place in an institutional framework of an
organizational structure different from a network (as in EVDO). The reason for
choosing EVDO for this study is also because it is assumed that the associative
relationships in EVDO are not restricted to the administrative structure but that they
include a wider network of relationships, both within the organization and outside
the organization. According to Anil K. Singh (1998), five types of networks of VDOs
exist today in India. These are:
Issue-based networks: During 1970s and 1980s several issue based networks emerged
to cater the issue-specific needs of the voluntary organisations, such as health,
environment, women, etc. These networks can further be divided into two-
categories- Structured Networks and Loose Networks. Structured networks are very
effective in information collection and dissemination, lobbying/ advocacy,
articulating and developing alternative view points etc., like CINI- Child-In-Need
Institute. Loose networks mainly mobilise people for campaign and movements like
Chilka movement mobilizing people for protecting the environment.
Area/region specific networks: Emergence of this type of networks is a very recent
phenomenon although regional/state-level federations/associations existed in some
pocket of the country; but after sharing experience with broad based national
network like VANI, many regional and state-level networks were formed by
voluntary organisations with almost similar objectives and structures. This process
is still going on in some parts of the country. All the categories like issue-based,
ideological, funder-led and funder-driven fall under this.
Ideological networks: In India, certain ideologies such as Gandhian, Marxist, Naxalities,
religions groups like Hindu, Muslim, Sikh, and Christians etc play a prominent role.
Many of them formed loose networks to coordinate and organise their activities.

70
Fumier-led or Fu111ter -driven networks : In India, a large number of International
funding agencies are actively working and providing financial assistance to
voluntary organisations. Oxfam, Ford Foundation and Agha Khan Foundation are
few examples. Some of them are having their offices in India with a number of
regional offices/branch offices. In the past, these agencies, and specially those
having offices in India, tried to bring their "partners" on a common platform and
monitor their activities. Like-wise Indian funding agencies (government and non-
government) also tried to set-up nodal agencies to plan, organise, implement and
monitor activities supported by them. These nodal agencies also work like nehvorks.
Relationship does not grow up in these network as these network are very rigid and
do not like their members to get associated with other funding agencies. Some of
them even dictate their terms and conditions to the voluntary organisations.
Broad-based national network: Broad-based networking emerge out of the realisation
that every issue/problems are interrelated with each other and if they are adressed
in isolation there will be no positive solution to them. To create an orchestrated effort
like minded people come together to fight for a common issue. VANI is perhaps the
only network of this kind. Being the only such broad-based national netvwrk in
India it has members from all regions, states, ideologies and organisations working
on different issues.

Having mentioned about the network form of organization, it is important to

describe the features of this kind of organization. Network is the structure of one of
the VDOs in this study.
Characteristics of network form of organization:
Its architecture:
A network is an informal and flexible mechanism based on the initiative and
interests of individuals and groups. No centralized planning and implementation is
done; activities and events of a network depend on the initiatives of different
members. Different members have different experiences. A network recognizes the
value of experiences of its members and eschews the concept of expertise.
Understandably, the diversity and variety of experiences of members is valued and
encouraged. As a result, the members are encouraged and supported to take control
over the activities, directions and resources of a network. A sense of shared
responsibility and ownership over the network and its management is gradually

71
evolved. This helps in ensuring democratic functioning and continued relevance to
and commitment of members. This entails in exploring new vistas, new members are
invited and existing members are encouraged-by all the existing active members of
the network. All this is done within the context of a shared vision and common
purpose. The capacity to mobilize its membership and their resources for
collaboration around common issues at a rapid pace is so maintained in the network
that quick and effective response of the members around emerging issues could be
activated and crystalised. The network requires some convenors or coordinators to
act as 'nodes' (Tandon 1998:7). The purpose of these nodes is energizing and
sustaining information, ideas and resources among members of the nehvork.

There are three elements in a network - Structure, Function and Dynamics. There
should be equilibrium between these three for a network to remain as a cohesive
force.
Structure

Function~
<:!> Dynamics

The equilibrium comes through:

• Clarity: Clarity about t~e vision, mission and strategies and the functions.
• Communication: Communication between the members and other stake holders
including those whom we want to influence.
• Cohesion: Solidarity amongst the members.
• Coordination: Amongst the members and between the members and the
organization's secretariat.
• Conflict/Crisis management and mechanism: Presence of a proper mechanism
within the network to tackle any organizational crisis or conflict between
members.
• Creativity: Creativity of the leader is very important aspect in a network.
Leadership can be individual or collective but it should be dynamic. If a network
is creative then only it can work out new agenda, have new articulated mission
and strategy, can scale up its impact and influence newly. If it is not creative it
becomes stagnant and often tends to become irrelevant.

72
According to Podolny and Page (1998), a number of scholars have argued that
Network forms of organization have the following principles:
1. Distinct ethic or value orientation on the part of exchange of partners. The
trusting ethics is one of the defining elements of a network form of governance.
Network form of governance is therefore not reducible to a hybridization of market
and hierarchial forms, which in contrast, are premised on a more adversarial
posture15 .
2. Norm of reciprocity as a guiding principle underlying this form of
organization. Each member of the network feels a sense of obligation to the other
party or parties rather than a desire to take advantage of any trust that may have
been established16 . Probably, the most vivid illustration of trustworthiness and
obligation in a network form of organization comes from Uzzi's (1997) examination
of subcontracting relationships in the New York garment industry. He is interested
in what he refers to as 'embedded ties', strong enduring relations between
manufacturers and subcontractors. These ties helped the 'CEO of this manufacturer
to personally notify the subcontractors because of his relationships with them
obliged him to help them adapt to the closing of his business, and his trust in them
led him to believe that they would not shrink on quality', because ~e manufacturer
is moving overseas (Uzzi, 1997:55).
More common principles of Network are:
• A network is always membership based. It has to serve all the expectations of its
members. There has to be some kind of principles set forth which helps the
network to function properly "and these key principles are to be decided upon by
its own members.

15
In his analysis of long term buyer-supplier relations among Japanese firms, Ronald
Dore (1983) points to what he calls the 'spirit of goodwill' underlying these
relationships. The central theme of this spirit of goodwill are a commitment to use
"voice" rather than "exit" (also in Hirschman 1970) to resolve disputes and a high
level of trust between the parties. Buyer and seller are both willing to make
relationship-specific investments without contractual guarantees protecting those
investments because each party expects that the other will not use the relationship-
specific investments to its own advantage.
16
In his analysis of business groups, Granovetter (1995) points to a high level of trust
and obligation among members of the groups. He argues that a distinctive feature of
these groups is that they constitute a moral community in so far as 'trustworthy
behaviour can be expected, normative standards understood and opportunism
foregone'.

73
• Each of the members of a network has their own individual identities.
Networking would not be a success if one is forced to give up its own identity to
fulfill the necessity of a network. So respecting individual's identity becomes an
important principle in networking.
• Although various organisation have different vision or issue to work with, there
has to be some commonality and compatibility of perspective when these
organisation come together to form a network. Otherwise the basic idea of
addressing common issue and interest of the members gets defeated.
Convergence of interest as a principle becomes equally important when it comes
to influencing public policy. The bargaining power of a network thus gets
strengthened.
• Commitment to core values of the network, mutual trust, integrity, is some other
principles that the members of a network should abide by.
• Another most important principle of a network should be transparency and
accountability from both the members and the secretariat in regard to
information sharing, functioning and all other activities of the network and the
members. Networks should always possess an articulated agenda to avoid any
kind of misconception about its functioning.
• All the members should get equal importance and weightage in t.he decision
making process and abide by the collective decision.

The network's tools for circulating infonuation:

Networks have tools for circulating information. These tools are: newsletter,
magazine, publications, and videos. These tools, however simple or limited, tend to
help in flow, animation and exchange of information, ideas and resources by
sustaining them over a period of time. Other medium for circulating information also
includes organizing meetings, discussions, conventions on ethical standards for the
voluntary sector, presentations facilitating exchange of visits and ideas with other
networks. These tools of a network help not just in circulating information about the
voluntary sector but also in holding dialogue and building alliance with other actors
of the society like political parties, media, Industries, Trade Unions and so on. Using
these tools and mediums of networking, networks try to or hope to reach their target
audience as effectively and efficiently as possible. Networks work towards the
direction of achieving their aim and objectives that they have set for themselves. In

74
other words, networking would become the tool for bringing Good Governance in
not only those organizations but for the entire voluntary sector.
A National Convention was held by VANI on the 'Emerging Issues, Concerns
and Problems of the Voluntary Sector' in 1998. One of the reasons for the success of
this convention was that VAN! had widely prepared and disseminated information
about the convention to its respective audience. The audience included people from
different sectors of the society, and not to forget, the grassroots workers and general
public.
As said by Michel CALLON, of the Sociological Center for Innovation in the
School of Mines in Paris, the elementary algebra of a network is the human-non-
human-human chain. The selection of non-human is imperative. If it is not consistent
with the network's resources, the diversity of its needs in information and it's strive
for democracy, everything becomes a 'holier then thou' 17. Further Calame believes
that the micro-computer is, the 'non-human' at the base of a voluntary network,
internationalized and de-centralised because:
• it offers various alternative methods for passing infonnation from one place to
another;
• it can manage collective knowledge (stored memory);
• it also enables paper 'printouts';
• it enables communication with other networks provided they respect other
disciplines; and-
• materials will be more and more compatible with one another.
Functions:
An increasingly large volume of research has sought to highlight the functionality of
network forms of organization. Sociologists and organizational scholars have
claimed that network forms allow participating firms to learn new skills or acquire
knowledge, gain legitimacy, improve economic performance and manage resource
dependencies. In addition, the widespread use of network forms of organization may
have unintended social welfare benefits. I consider proposed advantages separately.
• Recording: A crucial function in the life of network is keeping track and
recording the experiences, opinions, viewpoints and perspectives of its members.
This could be done either in a print or in audio-visual form. This function gets

17
Op., cited in Calame (1993: 65)

75
 played in some cases by a group of persons so identified; in some others, it gets
played by the coordinator of the network alone; and in yet other cases it gets
played in an unplanned and ad hoc basis (Tandon 1998)
• Learning: A number of scholars have emphasized the learning benefits of
network forms of organization (Dore 1983, Powell 1990, Uzzi 1997, HaiTtel 1991).
'Network forms of organization foster learning because they preserve greater
diversity of search routines than hierarchies, and they convey richer, more
complex information than the market' (Podolny and Page 1993: 62). As Powell
(1990: 304) writes, 'the most useful information is rarely the one that flows down
the formal chain of command in an organization, or that which can be inferred
from price signals. Rather, it is that which is obtained from someone you have
dealt in the past and found to be reliable'. There are two ways in which network
forms of organization can foster learning. First, they can encourage learning by
promoting the rapid transfer of self-contained pieces of information. In this view,
network ties are conduits or channels (Contractor and Lorange 1988b, Root 1988,
Hamel1991). The planned, systematic and periodic dissemination of information,
experiences, perspectives, illustrations is a major function of the net\vork and
gets performed well only if the recording function has been performed well.
Some networks do this function through an occasional letter from the coordinator
or convenor whereas others do it through a periodic newsletter. This Newsletter
varies from monthly to quarterly to once a year in periodicity. Second, rather than
simply facilitating the transfer of information between two nodes, the existence of
an enduring exchange relation may actually yield new knowledge. In effect, the
netWork becomes the locus of information rather than the nodes that comprise
the network.
Having mentioned the types of VDOs and also, explained in details about Network and
Networking, I have described the values considered by the VDOs.

2.3.5 Value framework of Voluntary Development Organizations:

According to VANI, values of VDOs should be based on the desire to advance the
well being of the people, particularly the marginalized sections in the society
reflected through
• Respect for rights, culture and dignity of the people with whom the organization
works;

76
• Ensuring that the organization's integrity, objectives, mandate and activities are
not distorted, subverted or corrupted by external or internal interests.
• Maintaining high standards of honesty and integrity at both personal and
organizational level.
A VDO should have the following traits:
• Believe in equality and oneness of humankind irrespective of caste, creed and
religion;
• Not be affiliated to any political party;
• Advance and ensure gender equality and justice with dignity;
• Encourage independent views and innovative thinking of men/women, served
or affected by the work of the organization, including the staff;
• Respect the rights, culture and dignity of all human beings;
• Promotes scientific temper, humanism and spirit of inquiry and reform; and
strives for excellence in all spheres of individual and collective activity.
VDOs should foster three common values, namely
1. Authenticity: It is to adopt and accept principles and practices being
convinced that they are good;
2. Openness in dealing with people and problems; and
3. Benef-iciary Participationts: encourage active participation of beneficiaries in
all stages of programmes-problem identification, program design, implementation
and evaluation.
As part of the value framework, V ANI describes two basic values that a VDO should
support. These are:
1. Justice and Equity: It indicates to work for the fairness in the distribution of
resources, wealth and power and in accessibility of every citizen to development
inputs; and
2. Sustainability and Empowerment: Initiating, facilitating and fostering
positive social development wherein the communities/partners/beneficiaries will be

18
Participation needs certain amount of ability on the part of the interested
group/ organization to get involved. Participation refers to power and can be
acquired through training. Merely being present in a decision-making process cannot
be called Participation. One has to contribute to its formulation. Similarly, doing an
activity is not Participation. Taking responsibility for an effective action will be
Participation.

77
empowered to have adequate control over their living conditions and sustain the
process of a more dignified, just, equitable and humane development.
In the 11ext section, I describe the legal framework in whiclz the VDOs opemtt', thereby
distinguishing them from other civil socieh; organizations.

2.3.6 Legal framework within which Voluntan; Development Organizations operate:

Legally five types of organization have nonprofit status in India19. These are: a
society registered under the Societies' Registration Act of 1860; a trust registered
either under the Indian Trust Act of 1882 or the Charitable and Religious Act of 1920;
a cooperative under the Cooperative Societies Act of 1904; a Trade Union Act of 1926;
and a company under Section 25 of the Companies Act of 1956. The focus here is on
the Societies Registration Act of 1860, under which the VDOs are registered.
The Central Act of 1860 was to enable the registration of literary, scientific
and charitable societies. Later amendments were made to the act by various states, to
broaden the types of organization that could be registered. For example, in Uttar
Pradesh, organizations that promote khadi, village industry and rural development
can also register under the act of 1860. The types of nonprofit organizations that can
register vary from state to state; they generally include development and
empowerment-oriented organizations, dubs, cultural and literary societies,
professional associations, educational institutions, scientific and medical institutions
as well as government -sponsored entities such as CAPART, the National Labour
Institute and the National Dairy Development Board. According to the main
provisions of the act, seven persons who subscribe to the Memorandum of
Association (MOA) can register a society. The MOA should include the name of the
society, its objectives, names, addresses and occupations of those members ascribing
to it, as well as those who are the members of its governing body. The latter are also
entrusted with the management of the society. A set of rules and regulations
governing the society must also be filed with the Register of Societies. These should
contain the name and address of the registered office of the society; manner, criteria
and procedure for enrolling and removing various categories of member; rights,
obligations and period of membership for the members; criteria, manner and
procedure of forming the governing body; manner in which meetings are conducted;

19
Much of the legal framework of VDOs is taken from Sen (1998), unless othem·ise
stated.

78
designation and manner of election and removal of its office-bearers; powers and
rights of members; procedure for conducting the annual general body meetings or
special meetings; account and audit procedures; and other provisions that are
required by a State act. The Registrar ensures that the various provisions of the act
have been met with, and that no other society .is registered with the same name
before granting a certificate of registration. According to the Central Act, a society is
required to submit a list of the members of the managing body, after the annual
general meeting. The rules of each state may have additional requirements. The
membership of a society, for which a fee may be charged, is open to those who
ascribe to its aims and objectives. The liability of its members is however, limited,
because no judgment can be enforced against their private assets.

2.4 TRENDS AND PATTERNS IN THE VOLUNTARY SECfOR

India has a vibrant voluntary sector today. VOs cover a wide spectrum in the
country from small loose knit local organisations to national federations. The number
of VOs has grown enormously over the past few decades. The size of the voluntary
sector varies widely across the country. The largest number of voluntary agencies is
in Maharashtra, West Bengal, Tamil Nadu followed by the other southem states. One
estimate for example, claims 25,000 registered grass-roots organisations are in Tamil
Nadu state alone. There are above 21,000 societies which have been registered with
the Ministry of Home Affairs, Government of India under the Foreign Contribution
(Regulation) Act (FCRA), 1976, since its inception in October, 1999. Of the total
registered societies under FCRA, more than 15,000 are such organizations received
foreign funds during 1998-99. The contribution of NPOs in Indian economy is
approximately 1.1% of GOP. There has been a mushrooming growth of VOs in the
country during the last three or four decades and it is mainly due to factors such as
widespread poverty and deprivation, growing problems arising from issues of
development, environment, socio-economic crises, social conflicts and tensions,
rising awareness and social concern, ineffective and weakening government delivery
mechanism, growing recognition of the role of VOs by the governments at the
national and intemational levels and rapid increase in the volume of national,
government and foreign funding to the voluntary sector and so on.
The exact number of third sector organizations (TSOs) and the scale of their
operations are not known in India. It looks almost impossible to make a correct

79
estimation due to the size, variety and uncertain life span of these initiatives.
However, it is generally held that the Third Sector in India is the largest shelter for
the counhy's labour force in the organized sector. Many studies have ventured in to
making an estimation or projection of the size of third sector in India. One estimate
notes that there are nearly four million registered non-government organizations
working in India. The other puts it at 1.2 million (PRIA, 2002). It is significant to note
that nearly half (49.6%) of these initiatives are unincorporated. Those ,..,rhich are
registered under any of the existing legislations generally fall under the category of
trusts, societies, trade unions, cooperatives or joint stock companies. Within the
broad spectrum of voluntary initiatives, there is polarisation between more
individual, small group and informal initiatives and those, which are more
organised.
The non-profit sector in India is predominantly rural based. More than half
(53%) of the known non-profits in the country operate in rural areas. The vast
majorities of them ,are small, with annual incomes of less than US$10,000 (Rs
400,000); no more than 500 have an income above US$100,000 (Rs 4 million). Nearly
three fourth of all have only volunteers or at most one paid staff. One out of 12 NPOs
(8.5%) employ more than 10 paid staff. Nearly 20 million persons (3.4% of total adult
population) work on a paid or volunteer basis. It is estimated that the workforce of
this sector nationwide works out to nearly 2.7 million full-time equivalent paid
employees. Most rural or field based initiatives rely on local people to become their
staff. Although the educational level of these people is rather poor, their commitment
is very high. In small and medium sized initiatives, specialisation of staff, division of
roles and organisational structures are weak (Srivasthava and Tandon, 2005).
Nature of Third Sector Organizations in India

Nature of Activihj Percenta~e Ratio

Religious (engaged in social development 26.50% Every fourth
though primary identity is a religious voluntary organisation
institution)
Community/ Social Service 21.30% Every fifth
Education 20.40% Every fifth
S_p_orts/ Culture 18.00% Every sixth
Health 6.60% Every fifteenth

Source: PRIA 2003

80
Religious organizations are really a major segment of the third sector in India. For
example, the number of religious trusts only in the Mumbai region alone as per 1976
statistics was 5,400 (with Hindus, including Jains, Sikhs and Buddhists): 2,954;
Muslims 1,207; Parsis: 1,001; Christians and Jews: 238. (Dadrawala, 1996). A number
of initiatives have been undertaken in the recent years at the not-for-profit as well as
for-profit sectors, particularly taking advantage of the internet, to create a database of
voluntary organisations in India. Government of India has also set up a Voluntary
Action Cell with the Planning Commission to co-ordinate the government interaction
with the voluntary organizations. Eventually, it is expected that the Cell \Viii
generate data about the organizations that interface with the government.

The contemporary voluntary sector in the country depicts some pattern in its growth.
These are outlined below:-
• There exist wide regional variations in voluntary actions and in terms of the
number of voluntary organisations. Most of tl1e VOs working at the grassroots
level, are small and medium-sized organisations with a weak financial base. The
number of large-sized VOs is few in the country and they are mainly urban
based. Some states such as Maharashtra, West Bengal and Tamil Nadu have a
larger number of VOs. Yet there are few village level organisations in these states.
On the other hand, Punjab, Assam and states in the North Eastern region have a
large number of village level organisations particularly the Mahila Mandals.
• VOs are gradually playing a greater role in policy processes and policy
development and have considerable impact on the evolution and development of
public policies, particularly in the areas of environment, women's issues, agro-
business, child welfare and development etc.
• The flow of government funding from national and international levels to the
voluntary sector has been increasing over the years and as a result of which, a
growing number of developmental VOs have appeared in the Indian scene,
actively participating in various government programmes particularly, in the
rural development and social welfare programmes.
Having described the trends and patterns of VDO growth, the difficulties and
challenges that are faced by the voluntary sector in India are put forward in the next
section.

81
2.4.1 Difficulties aud cltalleuges faciug the voluntary sector iu India:
Sen (1998) describes the dependency of VDOs on external funding as being a major
issue facing the voluntary sector. However, Schearer, Oliveira and T~mdon (1997)
state that the Civil Society Organizations (CSOs) can respond to the challenge for
greater financial stability in three ways:
• They can diversify their income sources to minimize dependence on any single
source;
• They can build working cash reserves and establish lines of credit and other
mechanisms to provide financial cushioning; and
• They can build endowments, capital funds and other forms of permanent assets
that give them a 'safety net' as well as collateral for borrowing when necessary.
According to Tandon (1998), three developmental challenges facing voluntary
action in India are poverty, population and illiteracy. In order to address these and
other challenges, some tasks need to be carried out within the sector. The first and
perhaps the most appropriate task is it to build roots within society. This means
requiring an orientation and the desire to make the 'sector' visible to those who may
not be the beneficiaries or clients but are likely to be interested in 'what we do and
willing to support us'. Likewise there is a question of building systems of
transparency, participation and accountability in their own governance. In other
words, VDOs are striving for good governance. Adopting and regularly reviewing a
clear written statement of their vision and mission, keeping systems and internal
practices accountable to the mission, to the governing boards and to the multiple
stakeholders, which include government, donors and community of beneficiaries
(Tandon, 1998 and VANI, 1999) preparation and making available annual narrative
and financial reports as well as reports on particular activities and on results of
reviews and evaluation (VANI, 1999). Perhaps most importantly, is the question of
building broad-based coalitions and partnerships. One of the major weaknesses of
the NGO sector is their action in isolation within the sector (Jha and Misra, 2000 and
Tandon, 1996), a problem dealt earlier in this chapter. Their mutual interaction and
even collaboration within and outside NGO sector, can make the efforts more
effective Gha and Misra, 2000). Some constraints that the VOs face today are given
below:-

82
• A conflict between the voluntary organisation and the people who stand to be
benefited from their actions, could often pose serious constraints for effective
voluntary work.
• The choice for a form of registration is rather limited. Organisations promoting
income generation, asset creation programmes, find it difficult to create an
appropriate form of registration. Thus, there is a need for simple and alternate
forms of registration that can incorporate the wide range of roles that the VOs
play today.
• Some voluntary agencies in India are working in isolation and they are scattered,
unorganized and operate at micro-level. They lack coordination and cooperation
between themselves and with other institutions as well.
• Most of the VOs working at the grass-roots level, lack the technical expertise,
professional competence, organisational infrastructure and capabilities which
restrict their endeavours. They also face conflicts within the organisation among
the diverse set of people particularly, on the question of roles and
responsibilities.
• Some NGOs lack proper management and administrative capabilities. They also
lack exposure to modem management principles, methods and tools essential in
the implementation of government programmes effectively.
• A large number of VOs lack proper infrastructures to utilise the inputs and
assistances (financial and technical) provided by the government. Besides, there
are innumerable conceptual, organizational and operational problems the
voluntary sector has been saddled with. These problems inhibit their
potentialities as a major factor for being a successful partner in the process of
development and to emerge as a viable third sector in civil society. The sector
today faces more criticism for the lack of transparency, autonomy, accountability
and credibility. This poses a serious problem to their democratic functioning and
value-based voluntarism.
The greatest challenges and the serious constraints faced by most of the voluntary
organisations, however, have been the unavailability of adequate funds and the lack
of knowledge regarding the sources and nature of funding. They are heavily
dependent on the institutional funds i.e. the grants from the government and
international funding sources, which are rather limited and fluctuating sources of
funding. VOs do not have sufficient resources to expend on the task of their

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operations, governance and meeting the developmental challenges. They have also to
work for responsive, accountable and transparent institutions and governance.
Towards this end, VDOs themselves need to be more transparent, participatory,
responsive and accountable in their own governance. They need to undergo what
Tandon calls 'internal rene\·val' (VANI, 1998:32).

Couclusio11:
This discussion of civil society in India suggests that the sector is a loose assembly of
voluntary development organizations, social movements, CBOs, welfare ·wings of
religious organizations. And therefore, civil society is not a homogenized group. It
comprises of heterogeneous and diverse set of agencies and actors. There are
different types of civil society organizations because they are context specific. But
one thing is certain: these CSOs are related to wider socio-political and economic
issues, concerns, interests and struggles, aiming to bring social change. The
interchangeable use of this wide-range of terms reflects the complex nature of the
phenomenon exhibited by VDOs. Further, the plural nature of Indian society is
reflected in the composition and the diversity of its voluntary development
organizations. However, this is greatly influenced by their dependence on external
funds. Their organizational structure varies from a formal bureaucratic type of
organization to informal democratic type VDO. The voluntary sector is playing a
catalytic role in terms of enabling people to define their own developmental
priorities. But that is not to say that the state has lost its relevance. It is very much
relevant to India. Market institutions have been asserting themselves. The need is for
a balance between the state, market and civil society, in India for sustainable, just
socio-economic development and democratic governance. Civil society is a complex
concept. The task of defining and operationalizing the concept, identifying civil
society's essential features and designing a strategy to assess its state is, in itself, is a
complex and potentially controversial process. Next chapter describes key features of
the concepts of civil society, networking and good governance.

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