NATIONAL POLICY ON VOLUNTARY SECTOR, 2007

i) Creating an enabling environment for Voluntary Organisations (VOs)

that not only stimulates their effectiveness but also protects their
identity and safeguards their autonomy.
ii) Enabling VOs to legitimately mobilize the necessary financial resources
from India and abroad.
iii) Identifying systems by which the Government may work together with
the Voluntary Sector.
iv) Encouraging VOs to adopt transparent and accountable systems of
governance and management.

SELF HELP GROUPS IN INDIA

SHGs are informal groups where people come together to overcome their
common problems, to save money, share resources, and support each
other. They are often formed by women who are marginalized or excluded from
traditional financial institutions

National Bank of Agriculture and Rural Development (NABARD) defines Self-Help

Groups as ‘a homogenous group of rural poor voluntarily formed to save
whatever amount they can conveniently save out of their earnings and mutually
agree to contribute and emergent credit needs’.

FUNCTIONS OF A SHG

 to encourage and motivate its members to save,

 to persuade them to make a collective plan for generation of additional
income, and
 to act as a conduit for formal banking services to reach them.
Such groups work as a collective guarantee system for members who propose to
borrow from organised sources. Consequently, Self-Help Groups have emerged as
the most effective mechanism for delivery of micro-finance services to the poor.
The range of financial services may include products such as deposits, loans,
money transfer and insurance.

SHG Movement in India

 The concept evolved over decades and was pioneered by Nobel

laureate Mohammad Yunusas Self Help Groups (SHGs) in 1970s.
 SHG movement in India gained momentum after 1992, when NABARD
realised its potential and started promoting it.
 NABARD’s SHG-Bank Linkage Program (SBLP) connected group
members to formal financial services.

PERFORMANCE OF SELF HELP GROUPS

 Economic empowerment: SHGs provide women with access to finance,

training, and business development services, enabling them to start their
own enterprises and generate income. This not only improves their
economic status but also gives them greater decision-making power within
their households and communities.
o For example, in Rajasthan, the Mahila Kisan Sashaktikaran
Pariyojana (MKSP) project has helped over 200,000 women farmers
form SHGs and improve their income levels.
 Social empowerment: These groups provide a platform for women to
speak up and participate in decision-making processes at the local level.
o For instance, Kerala's Kudumbashree Mission empowers women
through SHGs to combat alcoholism with campaigns, counseling, and
collaborations.
 Increased political participation: SHGs can help women to become more
involved in the political process by providing them with training in
leadership and advocacy skills.
 o For example, in Kerala, the Kudumbashree project has helped over
300,000 women form SHGs and participate in local governance.
 Reduced violence against women: Self-help groups can provide a safe
space for women to share their experiences of violence and to receive
support from other women.
 Contributing to crisis management- During the Covid-19 pandemic, they
emerged as pivotal players in crisis management, leading from the front in -
producing masks (with cultural variants such as Gamusa Masks in Assam),
sanitisers, and protective gear, creating awareness about the pandemic
(e.g. Patrakar Didis of Jharkhand), delivering essential goods (e.g. Floating
supermarkets in Kerala), running community kitchens (e.g. Prerna Canteens
in Uttar Pradesh) and in delivery of financial services (e.g. Bank Sakhis
managing bank rush for availing Covid-relief DBT cash transfers), notes the
Economic Survey 2022-23.
 Improved health and well-being
o For example, in Odisha, the Mission Shakti project has helped SHGs
set up community health centers, provide health insurance, and offer
training programs in health and hygiene.

MAJOR ISSUES FACED BY SHG

 Social Barriers:The prevailing patriarchal mindset in Indian society can lead

to negative perceptions and biases towards women-led initiatives,
 Geographical mobility: In the case of SHGs dominated by women, it is
found that there is no stability of the units as many married women are not
in a position to associate with the group due to the shift of their place of
residence
 Lack of Education and Awareness: Even though the authorities take
measures for creating awareness among the group members about the
schemes beneficial to them, still the majority of the group are unaware of
the schemes of assistance offered to them.
  Limited institutional support: Inadequate training facilities, lack of
Workshops for skill development and incentives for training.
 Financial Constraint: Due to the limited financial autonomy at home,
women’s SHGs fail to augment their collateral corpus adequately. This
makes banks reluctant to finance projects led by such SHGs.
 Limited market linkages: Low rural literacy hinders information gathering
and effective product marketing. Additionally, SHGs face challenges in
marketing due to digital illiteracy, limiting access to digital opportunities.

Addressing these challenges requires targeted interventions, capacity building,

policy support, and resource allocation to maximize the impact of SHGs in
empowering women and promoting gender equality.

GOVERNMENT INITIATIVES

Government of India is promoting Self Help Groups (SHGs) for realization of socio-
economic development through the following programmes:

1. Deen dayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-

NRLM), under Ministry of Rural Development, across the country in a
mission mode with the objective of organizing the rural poor women into
Self Help Groups (SHGs) and continuously nurturing and supporting them to
take economic activities till they attain appreciable increase in income over
a period of time to improve their quality of life and
come out of abject poverty.
In a historic step to make Lakhpati Didis (Women with annual earnings of
Rs. 1 lakh and more) from the Self Help Groups (SHGs), Ministry of Rural
Development signed MoU with Ministry of Ayush for skilling of rural youth
and empowering women

2. Priority Sector Lending

3. SHG- Bank linkeage scheme

CONCLUSION
 SHGs are well-placed to facilitate overall rural development owing to their
access to the last mile, ability to draw on communities’ trust and solidarity,
knowledge of local dynamics, and ability to swiftly manufacture simple
products and services through the aggregation of members’ economic
activities.

NGOS IN INDIA

A non-governmental organization (NGO) is a group that functions

independently of any government. It is usually non-profit. NGOs,
sometimes called civil society organizations, are established on community,
national, and international levels.

Impactful Roles of NGOs in India’s Development Landscape:

In developing countries India, there are numerous gaps left by the government in
the development process. These gaps are filled by NGOs:

 Work where the state is unwilling to work

 Work where state resources are inadequate
 Fighting social evils
 Right to Shelter: NGOs such as YUVA and SPARC in cities like Mumbai
 Right to Information: It is because of the efforts of NGOs that RTI has
become reality in India.
 Tribal Rights: As witnessed in the Vedanta vs. Posco case
 Implementation of welfare schemes
 Development and Operation of Infrastructure e.g. NGOs did a remarkable
job post-2004 Tsunami. Besides helping in rescue operations, NGOs in India
also set up vocational training centres
 Protection of Nature and Environment

Facts about NGOs

 Only about 10 per cent of the over 22 lakh NGOs file their annual income
and expenditure statements, revealed by CBI.
 IB report stated that the working of few NGOs in the name of protests
 against the government activities have become detrimental to the nation’s
development. It led to a loss of 2-3% of the country’s GDP.

Laws and Financial Regulations for NGOs in India

 Foreign funding of voluntary organizations in India

is regulated under FCRA act and is implemented by
 Foreign the Ministry of Home Affairs.
Contribution  The acts ensure that the recipients of foreign
(Regulation) Act contributions adhere to the stated purpose for
(FCRA), 2010 which such contribution has been obtained.
 Under the act organisations require to register
themselves every five years.
 Foreign Exchange Management Act (1999) aims to
consolidate and amend the law relating to foreign
exchange with the objective of facilitating external
trade and payments and for promoting the orderly
 Foreign development and maintenance of foreign
Exchange exchange market in India.
Management  A transaction under FEMA is called a fee or a salary
Act, 1999 while the same under FCRA is called a grant or a
contribution.
 In 2016, the powers of the Ministry of Finance to
monitor NGOs in India were placed under the
FEMA.

Challenges faced by NGOs :

 Asymmetry of power: Some NGOs have acquired the character of MNCs

because of large scale funding from foreign governments, companies. On
the other hand, a large chunk of NGOs lack even operational funding.
 Siphoning of funds: NGOs are becoming safe heavens to channelise the
black money, tax evasion. Such NGOs are causing loss to the exchequer by
helping others to evade taxes.
 NGOs for namesake: It is estimated that only about 1.5 percent of NGOs in
India actually undertake developmental work. Claiming involvement in
human rights initiatives or social empowerment, these organisations are
allegedly fronts for foreign supported extremist and secessionist groups. A
 large part of these funds is also being used for religious conversions, which
is forbidden under the FCRA.
 Political Activism: Some NGOs in India are involved in political activism with
foreign funds. A large proportion of NGOs have actively taken part in
political campaigns, including working as proxies for certain political
parties.
 Lack of Volunteerism/Social work among Youth due to less attractive career
opportunities and pay scales. Even parents also discourage their children
from social activities.

Measures to Enhance the Functioning of NGOs in India

 Capacity Building: Capacity building and training can help to provide crucial
new skills. NGOs can then more readily train staff and cultivate the
necessary skills within the organization to address challenges going
forward.
 Information, Communication and Technology: All NGOs should be using a
minimum of Internet, email, a basic website and relevant social media
platforms.
 Timely filing of annual income and expenditure: This will help in improving
the image of NGOs in the eyes of the government. NGOs also need to
ensure that laws, rules and regulations should be followed in letter and
spirit.
 Democratisation of leadership: NGOs face many challenges in their
journey. Such challenges can be effectively tackled by rotating leadership
among its members.
 Disclosing foreign funding: Globalisation has blurred the boundaries of
countries. Global challenges like climate change, human development,
poverty alleviation are some of the pressing problems. And NGOs have also
become globalised to deal with these challenges. Thus maintaining records
of such foreign fundings will ensure transparency in their functioning and
will create deterrence for laws.
 Inculcate the Essence of Voluntarism: NSS and NCC should encourage
students to participate in voluntarism from childhood days onwards.
Universities, colleges and schools have to collaborate with NGOs and
conduct campus interviews for the young graduates who are interested in
voluntarism.
 Increased Role in Rural Areas: In India, 65% of populations belong to rural
areas. NGOs, therefore, need to operate in rural areas on a bigger scale to
enlist the cooperation of village people in making their lives better. At the
same time, these NGOs have to encourage the educated young graduates
of rural areas to participate in voluntarism.