1. presentation srtt hmp

Initial Discussion Notes
for HMP Re-Structuring
Dated: August 2, 2012, Dehradoon

Nandan S. Bisht

www.nimbusconsulting.net, Email: info@nimbusconsulting.net

Discussion is organized in following three topics

1. Challenges in Current Structure

2. Current Institutional Experience on
Challenges

3. Possible Solutions


Challenges in Current Structure
1. Self sufficiency of Village Level Organization for Legal
Compliances -registered under Societies act of 1960 for
implementing project at village level.

2. Financial Sustainability of the Village Level organizations

3. Ensuring operational continuity of the project at village
level at sustained basis.

4. Ensuring a long term self -motivating, self -monitoring and
sustainable structure for such community structures.


Current Institutional Experience on
1. Self sufficiency Challenges
of Village Level
Organization for 1. Placing a legal structure requiring robust and costly
Legal Compliances compliances at village level have proved unsuccessful as
-registered under well as unwanted.
Societies act of
1960 for
implementing 2. At village level these legal structure do not provide any
project at village benefit or advantages over a well structured informal
level. community vehicles.

3. Cost, knowledge and willingness to comply with legal
requirement for these village level organization will always
be in shortfall !


Challenges
4. At the same time it is understood that not having a defined
rules, regulations and formal structure of such community
1. Self sufficiency level institution, would not provide them needed legitimacy or
of Village Level identity to deal with outside agencies, operate bank
Organization for accounts,
Legal Compliances
-registered under
Societies act of
1960 for 5. Solutions may be in a vehicle which is less cumbersome
implementing for compliances, cost effective and can be governed with a
project at village specific set of regulations relevant for the village level
level. activities, which at the same time can provide them legal
sanctity and identity to approach to connect and deal with
outer world.


Challenges
1. People are generally willing to pay for common necessity of
life like access of safe drinking water, which improves their
quality of life, though at the same time understanding that not
2. Financial all or not in all situation people will actually pay for it !
Sustainability of
the Village
Level 2. Other than community contribution on self motivating basis,
organizations continuous institutional arrangements would require to ensure
the desired funds into the scheme to continue it !

3. Institutional motivations ( in various forms) would also
require to keep people motivated to contribute to the finance of
the scheme whenever they can !.


Challenges
2. Financial
Sustainability of
the Village 4. This approach would require an institutional mechanism
Level to identify people in following categories namely;
organizations
a.Willing to pay for the scheme and Will Pay !

a.Willing to pay for the scheme but Can’t Pay !

a.Can pay but will pay with only Social Pressure !


Challenges
3. Ensuring 1. Common necessity are important but ! Individual
operational livelihood are critical ! And experience would always
continuity of the suggest that people with forgo first for the second !!!
project at village
level at sustained
basis. 2. Ensuring that common necessity is linked to common or
individual enhancement of livelihood opportunity would
contribute hugely for the continuity of the project activities.

3. Therefor using or harnessing the community vehicle
created as platform to promote or discuss such common
or individual livelihood activities would be beneficial for
the long term project sustainability.


Challenges
1. For a long term all round sustainability much beyond the
4. Ensuring a long project durations, community driven monitoring, motivating,
term self -motivating, structure to be designed and strengthened.
self -monitoring and
sustainable structure 2. Such Community driven structure would require financial
for such community support and guidance from external sources ( funding or
structures. implementing agency)

3. Such community driven structure would require to
develop visible value added services for supporting village
level organization and in return can generate partial revenue
from village level institutions, other source of revenue may
also need to identified. Gradually such supporting
community driven structure would require to develop
capacities for training and monitoring.


Potential Solutions to be Identified in !
1. At village level requires less cumbersome legal vehicles
such as groups registered as mutual benefit trust, with
clearly defined rules, regulations. These are recognized in
law, can contract, open bank accounts, can have a self
governing systems. ( recognized as AOP’s in Tax Laws)

2. These village level group need to be federated in a legal
structure that is again flexible and cater to the need of the
project, operational, and financial issues. ( proposed a
section 25company without capital.)

3. Village level organizations to contribute to village level
funds, and a matching contribution is provided by
Federation with right to monitor, access information etc.


4. Federation of Village level mutual benefit trust need to
develop set of services or value added services to village
level trusts. ( training, capacity building, need based
trainings, trainings to common income groups, vocational
trainings, identifying vocational training courses, conflict
resolutions etc. )

5. Federation to have governance system involving nominee
from village level organization on rotation basis, other
members being nominated by funding agencies or their
partner organizations.
6. Simple and self doable accounting systems to be
developed for village level trusts.
7. Responsibility for annual review and audit to be with
federations ( i.e. by constitution it would be possible to
entrust the audit responsibility with Federation instead of a
Chartered Accountant !!


8. Skills and capacities required for federation operation
may be drawn on need basis from funding or implementing
partner in initial phase, and would need to be developed in
house over a defined time period.

9. Federation may initial require adequate funding support,
sources available in pipeline ( foreign or Indian ) can be
deployed. For foreign based funding, moving funds to
federation ( a section 25 company structure, without equity
capital) would require to follow a procedural window made
available in new FCRA Act and Rules.
"24. Procedure for transferring foreign contribution to any unregistered person.—(1) A person who
has been granted a certificate of registration or prior permission under section 11 and intends to
transfer part of the foreign contribution received by him to a person who has not been granted a
certificate of registration or prior permission under the Act, may transfer such foreign contribution to
an extent not exceeding ten per cent of the total value thereof and for this purpose, make an
application to the Central Government in Form FC-10.


Thank You

Nandan S. Bisht
Director: Nimbus Consulting Pvt. Ltd.
nandan@nimbusconsulting.net
www.nimbusconsulting.net,

13

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