Urgent need to create a genuine and vital participative democracy

The Urgent Need to Revitalise and Rebalance the Institutional Sectors of Our Democracy: A note prepared by Dr Ashok Khosla

The current state of our political, economic and social institutions highlights the urgent need, in creating a genuine and vital participative democracy, for a better balance among the three primary sectors of government (public sector), business (private sector) and civil society (people’s sector).

From the time of Independence to 1991, the predominant attention and operational emphasis was given by the nation to building the “First Pillar of Society”, the institutions of democratic governance, including the political platforms for creating legislation, the judicial structures for ensuring fairness and justice, and the bureaucratic framework for implementing the policies of the public sector and the regulation of the private sector.

From 1991 until now, the role of the “Second Pillar of Society”, i.e., business and private enterprise has been greatly strengthened and brought to a level where this sector can contribute solidly to national development in terms of delivering much needed jobs, goods and services to the economy. This domain is now also able to hold its own in influencing national policy and the public sector to provide the support it needs to fulfil its role.

In the meantime, particularly in the latter decades, the “Third Pillar”, the people’s sector, i.e., Civil Society, became increasingly marginalised with respect to both the public and private sectors. Civil society counts in its fold the wide range of institutions that operate outside government and business – that act as a base (or “glue”) which binds the disparate interests of society into a more harmonious, coherent and thus productive whole. It includes voluntary agencies, NGOs, universities, think tanks, the media, trade unions, human rights groups, faith-based organisations, women’s associations, youth and sports organisations, cultural clubs, and the many other entities that make human life satisfying, fulfilling and worthwhile. And fair and equitable. This is why it is also referred to as the People’s Sector. What it lacks in electoral endorsement, or financial success, a healthy civil society gets its standing by gaining widespread acceptance, appreciation and support by the individuals, households and communities it serves. As the response of different sectors of the economy to the current COVID-19 Pandemic has amply demonstrated Civil Society institutions are an essential and crucial player in delivering services to the population at large and in acting as a moral conscience of the nation.

Each of the three sectors has a legitimate, indeed critical role, of its own in building a resilient democratic nation. In any case, each is essential in the formation of a better and more prosperous, equitable and fulfilling future for all.

This note sets out a basic agenda of ten simple, specific propositions and actions that aim to redress the existing imbalance and strengthen the capacity of civil society to deliver its true potential contribution to sustained and resilient national development for the benefit of all.


  1. Officially recognize the Civil Society sector as the critically essential third base pillar of national development, complementing Government and Business – at National, State & District levels. Government must:
  • Ensure meaningful consultation with Civil Society Institutions (CSIs) representatives on all policies and schemes related to human wellbeing, social development and environmental health;
  • Consult with and involve representative a representative cross-section of CSIs in the formulation of policies and procedures affecting the roles and performance of civil society.
  1. . These should, at least, include provisions to:
  • Register: Start-ups, SMEs, Large, National, Multinational Non-profits, including Overseas Operations
  • Innovate: Social Enterprise legislation, e.g., Benefit Corporations (B-Corps, now flourishing in many countries)
  • Enable: beyond service delivery, to research, innovation, consulting, advocacy, etc
  • Provide: freedom, independence, autonomy and facilitation
  • Require: integrity, accountability, transparency, etc
  • Support: institutional infrastructures, facilitating mechanisms
  • Mandate: formal Board, Advisors, Meetings, CEO, CFO, Finance, Audit, Committees, etc

3.0 Initiate, in collaboration with CSIs, regular (bi-annual) CSI surveys and publish Data Base – National, State, District, etc.

4.0 Provide and simplify FUNDING

4.1 At least 2% of govt environment and development-related schemes for a Fund to support innovative projects in CSIs

4.2 At least 50% of Business CSR to partners unrelated to the donor’s Business

4.3 100% tax deduction, for CSR grants above the mandatory 2%, if the grant is to partners unrelated to the donor’s Business

4.4 Permit tax exempt CSIs to invest their surplus funds in non-specified financial instruments and other assets

4.4 No ceilings on donor contributions

4.5 Remove current provisions of FCRA relating to:

  • Restriction of banking channels to SBI, New Delhi
  • Ridiculously low limits on administrative expenses
  • Restrictions on making sub-grants
  • Unnecessary registrations and reports, personal information on Board Members, etc
  1. Encourage and facilitate Project partnerships between CSI, Government and Business; promote constructive collaboration based on greater mutual trust and accountability

6. Make it mandatory for all listed companies, PSUs and banks to have at least one CSI representative on their CSR Committees and, where possible on their management or advisory Boards.

7. Help build CSI staff and institutional capabilities – by encouraging and funding scholarships and internships in Schools, Colleges, Business Training, Education, Degree, etc. related to Social entrepreneurship programs.

  1. Permit global reach: foreign operations, including – with prior government approval – development/relief/training projects abroad; facilitate international interface, funding, collaboration, cooperation, cocreation, joint ventures and operation.
  2. Facilitate and encourage regular Public Audit Reports on all major publicly funded projects, whether implemented by government, business and civil society institutions.

10.0 Establish strong mechanisms for consultation and building mutual support and trust among the three sectors, Government, Business and Civil Society. Formally invite: CSI inputs to the nation’s Annual Budget process

For more detailed background on these assertions please click on:

  1. Policies needed to Strengthen Civil Society Capacity in India (2021)
  1. Action needed within Civil Society to Reach Its Full Potential (2021)
  1. VANI Report on National Policy for the Voluntary Sector (2021)
  1. Empowering Civil Society in India (2020)
  1. National Policy for the Voluntary Sector (2007)

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