Budget 2019: Appeal the govt to reduce tax, reinstate tax benefits on donations to NGOs, says Prashant Agrawal, President, Narayan Seva Sansthan

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July 04, 2019 7:25 PM

Union Budget 2019 India: Beyond surgeries, Narayan Seva Sansthan is also providing free education and vocational training to differently-abled people from the rural and tribal areas and the so-called lower strata of the society.

Budget 2019, NGOs India Budget 2019 India, Charity Budget 2019 India, Budget 2019-20, Budget 2019 NGOs , Union Budget NGOs , Narendra Modi, Narayan Seva Sansthan, Prashant Agrawal, UdaipurNarayan Seva Sansthan has two hospitals in Udaipur with a total capacity of 1,100 beds where patients from far-flung areas of the country and abroad visit to get treatment and corrective surgeries.

Budget 2019 India: Udaipur’s ‘Narayan Seva Sansthan’ is one of the few NGOs or Non-Profit Charity Organizations which have become a household name across the country because of the work they are doing. Narayan Seva Sansthan is best known for providing ‘free of cost’ corrective surgeries of patients with disabilities occurred either due to polio and other ‘by birth’ conditions or those who have lost their limbs in accidents. Narayan Seva Sansthan has two hospitals in Udaipur with a total capacity of 1,100 beds where patients from far-flung areas of the country and abroad visit to get treatment and corrective surgeries. Beyond surgeries, Narayan Seva Sansthan is also providing free education and vocational training to differently-abled people from the rural and tribal areas and the so-called lower strata of the society. Speaking to Financial Express Online, Prashant Agrawal, President of Narayan Seva Sansthan, talked about the challenges faced by the social service organisations and his expectations from Modi government and Budget 2019. Excerpts:

From a humble beginning decades ago to now running such a big NGO which functions across the country, you must have crossed many hurdles. But going forward, what are the new challenges that see now?

The biggest challenge for us right now is that the level of support the govt should provide to us is not there.

On what levels? Policy or…

On Policy level. For example, we have to pay GST.

So, to do something as charitable as the charity itself, you need to pay GST?

Yes, we pay GST. We pay commercial electricity and water bill.

OK. Earlier there was news that govt has revoked GST on Langar supplies to Gurudwaras. But it seems they still levy GST on some charitable activities?

Yes. Secondly, I want to tell the govt that people who are doing service to society are not selling their products commercially or otherwise. We take nothing from people for the help we provide. But when we have to buy items to provide the same service to needy people, we have to pay 18%, 12% or 28% GST. This is our cost. We don’t get any input credit for that because we are not selling or re-selling it. So, for them, the cost of the product is becoming very high. Something we are going to offer for free, we get it at a very high cost because of GST’s implication.

Somewhere the govt is feeling that organisations (NGOs) are not working properly, or those who are working are making money for themselves or its trustees work for their personal gains. So, if the govt thinks with such a mindset, it becomes difficult for people who are doing good work, pure work because they are also painted with the same brush. This mindset is costing us.

Prashant Agrawal, President of Narayan Seva SansthanPrashant Agrawal, President of Narayan Seva Sansthan

On the other hand, this is a reality as well. There are NGOs which are only opened to get govt’s grant money and do nothing? So many NGOs have opened.

Yes, you are right. And I am sorry to say this but there are many NGOs run by people who have political support. They run many big NGOs, and their interest is mala fide. Because of their presence, the govt has now ended the 100% tax deduction benefit under 35AC on help from donors to NGOs. With 35AC, people were more inclined towards donating to NGOs as it gave them the double benefit of helping the needy and also getting the tax deduction. But now, the govt of India has stopped giving this tax benefit under 35AC. So, donating to NGOs is not as lucrative now. It is a big blow to NGOs like ours which are constantly involved in social service.

Budget 2019 is on July 5. What is your appeal to FM Nirmala Sitharaman?

We don’t have that big an approach in the govt. If she visits Narayan Seva Sansthan to positively see and understand what we are doing then it can trigger a big change. Our Trust and people like us are now facing many problems. There is GST implication plus we pay all commercial bills, also no rebate on purchasing land for organisations involved in social work. Even the system to get advertisement from the govt for social organisations is very complicated. One has to run from pillar-to-post to get these ads. One has to deal with 3-4 govt agencies to get these ads. And then there is corruption. I am sorry to say these things but this is the real picture, it has become next to impossible now to get any financial help from the govt.

Earlier, there was no service tax on items we used to purchase for Divyangjan (specially-abled people) but after GST’s implementation, there is 5% tax on these items as well. So, if we have to buy a wheel-chair, our cost has increased by 5%. If the govt levies taxes on items like wheel-chairs and tricycles, how will we work then? I request the media to take our message to the policy-makers that we would like to meet them and represent our cause. We would like to explain to them all the problems we are facing. This is a big challenge for us. If the general public also stops donating now, we won’t be able to work at all. We are working mostly on the general public’s donations.

So, there is no help from the Govt?

There is some help but it is negligible.

What about working with govt’s flagship schemes like Ayushman Bharat?

Ayushman Bharat is a huge scheme. Now even Rajasthan Govt is part of it. Earlier there was Bhamashah scheme of the state govt, now we have both. We would like to join Ayushman Bharat. We are working in that direction.

Donations from the govt is one part. What about getting donations under philanthropy work done by big corporates. There are many foundations which work towards CSR of corporates. Shouldn’t corporate India pledge more towards philanthropy?

Our team met different corporates. We were hoping that they will help us under their CSR obligations but they have opened their own foundations. They work in their own capacity. They don’t want to give (donations) to others.

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What you think is the reason behind that reluctance on corporate India’s part? Even though an organisation like yours is doing tangible work on the ground.

Some organisations did donate to us. Like Airport Authority of India, SAIl, BHEL

But these are public sector organisations. No private organisation is coming forward?

It is compulsory for private organisations to give 2% fund for CSR. If one wants that donation they’ll have to pass through corruption in their CSR wings. You have to pay some money back to these people. So we humbly declined their offer. We have no expectations from CSR.

Are the corporate honchos aware of this level of corruption in their CSR wings?

No, they don’t. We don’t know them, we can not reach them. We can only reach out to the people who are sitting with MDs and CEOs but they have their ‘demands’, so we are not able to move forward.

There are so many challenges, as you mentioned. What is inspiring you to keep moving forward?

The support of the general public. Small donors have big faith in Narayan Seva Sansthan. They are running it. 24x7x365, we are running this, free of cost for the needy. We do not take a single penny from them. It’s our small donors who are the real force behind all this. The challenge is that a small donor cannot keep donating all the time. They can give once or twice. They have their limitations and we understand that but we need to run it for needy people.

What is your expectation from Budget 2019?

In the budget, they don’t think from an NGO’s perspective. For example, honourable Modiji has been serious about social aspects in all his budgets. He is very sensitive about Divyangjans and seva (social service). Even the term ‘Divyang’ was promoted by him. Because of him, the social justice and empowerment ministry has done a lot of good work in the last five years. You take any of his Mann Ki Baat programs, he always mentions Divyang. I want to appeal to him and tell him about our problems. Only he can solve these issues. I don’t think he knows about the problems we are facing.

What would be your appeal to PM Modi?

I urge him to hear the problems faced by people who are doing true social service, who have a clear conscience. They should not be paying GST on items used by Divyangs and in social service. I would also appeal to him to reinstate 35AC that gave 100% tax deductions on donations to NGOs. I also want him to make a rule that all trustees of all NGOs should make their financial details – income and expenditure – public. They should furbish it on govt’s websites for greater transparency. If we want to save social service, want people to continue believing in social service, this step on transparency should be taken immediately.

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