The National Safai Karamcharis Finance and Development Corporation (NSFDC) has recently issued an advisory to all municipalities and panchayats across India. The advisory urges these local bodies to ensure adequate protection for all sanitation workers during the ongoing COVID-19 pandemic by providing Personal Protective Equipment (PPE).
Key Points in the NSFDC Advisory
The NSFDC has asked all local bodies to establish standard operating procedures specifically for ensuring the safety of sanitation staff. Part of these procedures should include mandatory orientation for the sanitation workers. This orientation should cover critical aspects such as knowledge about COVID-19, social distancing norms, and the requirement of precautionary measures.
In addition, the local bodies are asked to provide essential equipment like masks, gloves, gumboots and jackets. The provision of soaps and hand sanitisers is recommended to help maintain hygiene.
About the National Safai Karamcharis Finance and Development Corporation
The NSFDC is a wholly owned Government of India Undertaking functioning under the Ministry of Social Justice & Empowerment. Established in 1997 as a “Not for Profit” Company under Section 25 of the Companies Act, 1956 (now Section 8 of Companies Act 2013), it plays a crucial role in the socio-economic upliftment of the Safai Karamcharis, Scavengers, and their dependents throughout India. The corporation achieves this through various loan and non-loan based schemes.
The NSFDC also plays a pivotal role in the elimination of manual scavenging – a remnant symbol of untouchability. It is designated as the Nodal Agency for implementation of the Central Sector Self Employment Scheme for Rehabilitation of Manual Scavengers (SRMS) under the aegis of the Ministry of Social Justice & Empowerment.
Understanding Section 25 of the Companies Act, 1956
Section 25 of the Companies Act, 1956, allows the formation of a separate legal entity that can promote charity without establishing a Trust or a Society. Now referred to as Section 8 of the Companies Act, 2013, this section mandates that any income must be reinvested towards promoting the intended object or charity, rather than generating profits for owners and shareholders.
Benefits under Section 25
Companies established under Section 25 enjoy certain benefits. They are exempt from statutory requirements of minimum paid-up capital. These companies also have an easier administrative process compared to Trusts and Societies including less rigid requirements for board meetings, easier procedures to increase directors, ease for donors to join, leave or transfer shares, and less stringent book-keeping and auditing requirements.
Section 25 companies enjoy significant tax advantages such as exemptions from stamp duty payments. Depending upon how they’re registered under the Income-Tax Act, these companies could benefit from income-tax exemptions or provisions wherein donors receive income deductions in their income-tax liability.