Non-profit activities by non-Government sources in our country are perhaps as old as Indian civilization. There has been strong philanthropist tradition in our country in which private, individuals as well as organizations have been contributing in various field of social development. However, such philanthropist activities have been mostly in the field of education, health, social welfare and religious, etc. These are the age-old traditional fields of philanthropist activities by the Indian private sector (non-Government sector). These are the fields in which huge amount is contributed by non-Government sectors. In the State like Gujarat, and may be few more, overwhelming majority of educational, medical, social welfare, institutions are funded and managed outside the Government sector. In this brief note I would deal with the private capital or private contribution in the field of rural development, as it is relatively very new field, which has not attracted the capital or contribution from the private sources on significant scale.

On the role of private sector capital, for non-profit activities, I think, all the major non-Government funding agencies should give highest priority to the poverty alleviation programmes both in rural as well as urban centers. The poverty alleviation programmes in rural areas should be preferred for the support on the strong rationale that if rural people get livelihood in their own villages, to that extent pressure on urban centers will get reduced. In other words, rural prosperity will prevent several severe problems of urban centers.

However, the fact is that by and large, Indian non-Government sectors including corporate companies and trusts are not very much inclined to support rural development programme. Ofcourse, there are few exceptions. I think, here there is a role for CII to take lead in mobilizing non-Government sector and form a kind of consortium, which can support good rural development projects. Say, if 100 companies decide to form a consortium and then support good projects of proven NGOs for 5 - 10 years, it would make significant impact. Such support should be given to not only proven practicing NGOs, but, there could be a condition to raise matching contribution in the respective project.

Recently Confederation of Indian Industries is showing interest in Rural Development, but, the attempts have to be well focussed and well directed.

The resources are scarce, while demand from NGOs would be much more. The consortium should use the criteria of merit in selecting the NGOs, which can deliver the goods. I believe in rural poverty alleviation, there is no special need for experimentation or innovation as there are numbers of successful examples, which need to be replicated at larger scale. Therefore, setting aside all the ideological biases in favour or against of small NGOs, big NGOs, new NGOs, old NGOs, the principle of supporting proven NGOs should be adopted in the competitive age that we are living. This is the only sound way in which competent organizations should be further encouraged. It would be ofcourse, the responsibility of such competent NGOs to support and sponsor new NGOs and CBOs in and around their area of operation.

The proposed consortium may also approach the Government for policy change to offer more incentive to the private sector donors under the Income Tax Act. For example, for the poverty alleviation programme, in the vulnerable drought prone regions and tribal regions, the 100 % tax benefit may be offered to the donors. With the financial resources of the State and Central Government, almost exhausted - and some States in almost bankruptcy conditions, the Government should provide attractive incentive to the private sector donors in rural development.

The suggested consortium of Business Houses should also focus more on the development of water and land resources, particularly water resources, as many parts of India are going to witness more and more difficult situation in water sector. The Companies and NGOs have a role to play in this field, collaborating with the Government efforts. Also, such consortium should select few most vulnerable regions / districts to concentrate so that the most needy regions / people could be helped and the impact would be tangible.

02.09.2000